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VOL 26 / ISSUE 16 / 25 APRIL 2024 / £4.
49
DIVIDEND
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The companies which
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Contents
NEWS
06 Warnings from chip giants casts doubt over
semiconductor optimism 28
07 Retail sales not as bad as reported, while consumer
confidence rises slowly
08 FTSE 100 finally joins the new-highs club
despite being unloved for years
09 United Airlines soars on upgrades despite
Boeing-related hit
09 Ocado shares wobble after M&S relationship turns sour
1 1 Retail giant Next sees strong first-quarter
full-price sales increase
12 All eyes on sales momentum for Eli Lilly’s obesity
drug Zepbound
14 UK housing market springs a surprise but all eyes still
turned to the US
GREAT IDEAS
16 Buy underappreciated Gaming Realms before
the market recognises its true worth
19 Why investors should buy this gold tracker
UPDATES
21 We’re sticking with Dr Martens despite the
latest profit warning
FEATURES
23 Are corporate spin-offs a good hunting ground
for profitable investments?
28 COVER STORY
Dividend machines
The companies which reward shareholders
like clockwork
40
34 Why Darktrace is getting exciting again
36 Small World: read about Gresham Technologies,
T Clarke, REDX Pharma and more
40 Tap into micro caps for a slice of UK innovation
44 PERSONAL FINANCE
The perils of drawing your pension early
49 INVESTMENT TRUSTS
Meet the newest addition to Alliance Trust’s
roster of managers
54 EMERGING MARKETS
Chinese manufacturing PMI data needs to be closely watched
58 DAN COATSWORTH
Wage growth pressures remain high: Why it
matters to investors
58 63
61 EDITOR’S VIEW
What Bitcoin halving means and why the price barely moved
63 ASK RACHEL
Should I use a SIPP to supplement my workplace pension?
65 INDEX
Shares, funds, ETFs and investment trusts in this issue
25 April 2024 | SHARES | 03

Contents
Three important things in this week’s magazine

Feature:
D IVI D
Micro ca
ps
MACH IENN D
Feature:
Corporate
spin- offs
ES
The com
p
reward shanies which Are corp
Tap into
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work profitab unting ground a slice o micro caps for
le invest fo f UK inn
ovation
ments? r
Find out
The sizeab mo
growth ma re about a ‘forgot
losers me le gap between wi ten
A
rket’
ans due nners an in recent
dil d
igence is yea
crucial key rationa Chris Mc rs.
T
le for inve
smallest com sting in the UK Micro Vey, co-manager of
his feature is that the panies on the UK Cap
Shares: ‘UK Growth Fund (BYthe FP Octopus
mergers, explores spin-offs Perform se busine market
an cap sse growth ma smaller companies Q7HN4) told
loo
them and king at the rationa de-
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cap busine for several reason FTSE AIM rket with the FTSE are the forgotten
how they le for e spin-off Index, offe Sm
and
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to
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ons, proved and has, with yet trading Nasdaq, well ahe earnings growth
I
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nterest rate recent fruitful
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ance are excited n disconnect will earnings multiple.
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remains a
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ips
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−38 2023
28 | SHARES 67 constituen of 28 rter of es mag 40 Chart: Shar
ts in the S&PMarch 2024, there a
| 25 April azine • Sour | SHARES es magazine 2024
2024 ce: Goog | 25 April • Source:
le 2024
500 Divide we LSEG
nd Aristoc re
rats
The companies you can rely Should you consider How to diversify your portfolio
25 April 2024
| SHARES
| 23
on to increase their payouts investing in spin-offs? through micro-caps

Shares reveals the most reliable As a growing number of companies Small can be beautiful when it
dividend raisers and picks one opt to demerge their subsidiaries comes to growth and innovation.
stock each from the UK, Europe and list them on the market we
and the US as well as a global look at how the returns stack up.
‘aristocrats’ fund.
Visit our website for more articles

Did you know that we publish daily news stories on our
website as bonus content? These articles do not appear
in the magazine so make sure you keep abreast of market
activities by visiting our website on a regular basis.
Associated British Foods shares
Over the past week we’ve written a variety of news stories regain pre-pandemic highs as
online that do not appear in this magazine, including: earnings trounce forecasts
JD Sports shares climb after Investors glued to Tesla earnings, US buyer snaps up building
announcing deal to buy US rival and the news could be bad products maker Tyman in latest
for $1.1 billion M&A deal
04 | SHARES 25 April 2024

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News
Warnings from chip giants casts

doubt over semiconductor optimism
ASML and TSMC have both hinted TSMC
that demand has weakened in the
New Taiwan dollar
first half of the year
800
C
hip stocks are coming under pressure 750
from investors made nervous by hints
700
of weakening demand during the first
half of 2024. During the past week 650
or so there have been warnings from industry
600
bellwethers from Europe and the Far East,
dampening enthusiasm just as earnings season 550
gets going in earnest. 500
On 22 April Taiwan Semiconductor
Manufacturing Company (TSM:NYSE), or simply Jul Oct Jan Apr
2023 2024
TSMC, the world’s biggest contract chipmaker,
delivered profit that beat first-quarter estimates Chart: Shares magazine • Source: LSEG
and predicted second-quarter sales of up to 30%
amid a wave of demand for the chips that power AI a substantial drop from the previous quarter,
(artificial intelligence) applications. significantly missing the consensus estimate of
Yet the $600 billion firm pulled back on €4.63 billion.
expectations for growth in the overall chip sector The shortfall sounds worse than it is given the
and refrained from revising up its capital spending sheer size of single-kit sales. Even so, it poses an
plans, as had been widely expected, triggering a interesting question for sector investors – having
sell-off of its shares. It capped a two-week drift that largely gunned higher this year thanks to booming
has seen the shares lose more than 12% since 11 demand for the most advanced AI technology,
April, the New York-listed stock closing at have market expectations crept too high?
a fraction over $130. Readers may have a clearer
It is a run that has coincided picture by the end of next week,
with a near-10% slump for with chips stocks including
ASML (ASML:AMS), the Dutch Intel (INTC:NASDAQ),
tech firm that dominates ON Semiconductor
the market for lithography (ON:NASDAQ) and
systems. These machines Advanced Micro Devices
can cost hundreds of (AMD:NASDAQ) will have
millions of dollars each reported, as will Lam
and use light beams to help Research (LRCX:NASDAQ),
create microscopic circuitry, another kit supplier crucial
crucial for chip manufacturing. to the industry. Nvidia
ASML reported net sales of (NVDA:NASDAQ) will not report
€5.29 billion (17 April), missing earnings until 22 May.
first quarter 2024 consensus In the meantime, the US SOX
pitched at €5.39 billion, and notably, net semiconductor index, which measures
bookings for ASML’s equipment, a key indicator the world’s meaningful chips stocks, has hit the
of future revenue. This stood at €3.61 billion for skids, falling around 15% since early March, having
Q1, marking a 4% decrease year-on-year and rallied 30% during the first 10 weeks of 2024. [SF]
06 | SHARES | 25 April 2024

News
Retail sales not as bad as

reported, while consumer
confidence rises slowly
Consumer spending is rising but a new years of decline.
survey finds ‘hesitancy’ remains When measured on a value basis – taking into
account the total amount of pounds spent rather
T
here was a general wringing of hands than the number of items bought – the increase on
on 19 April over the latest monthly March 2023 was 3.3%, or 3.4% excluding fuel sales,
retail sales figures published by the ONS continuing a run of positive year-on-year growth
(Office for National Statistics) which dating all the way back to February 2021.
showed the volume of goods bought flatlined from So why all the gloom? Admittedly there are
February to March rather than increasing by 0.3% some areas of retail sales which are seeing a steady
as expected. decline in sales in value terms – household goods
However, when measured on an annual basis in general being a good example, and in particular
rather than a month-on-month basis – which to furniture, lighting and electrical goods – yet there
our mind seems a much fairer comparison – other areas which are growing such as clothing and
volumes rose by 0.8%, the best result since March hardware (which we read as positive for our call on
2022, potentially signalling an end to almost two DIY retailer Kingfisher (KGF)).
Annual
Annual retail
retail sales
sales
Even in volume terms, sales in the three months
Annual
growth retail
by sales
category to March were up 1.9% marking the fastest
growth by category
growth by category quarterly growth since 2021 and prompting
Alex Kerr of Capital Economics to declare the
Three- retail recession ‘at an end’ in a quote for the
Three-
month
Three- Financial Times.
month
Category Mar-24 trend
month It would be premature to celebrate victory,
Category Mar-24 trend
Category Mar-24 trend however, as the latest PwC Consumer Sentiment
Total sales by volume 0.8% UP
Total sales by volume 0.8% UP survey shows.
Total
Total sales
sales by
by volume
value 0.8%
3.3% UP
UP
Total sales by value 3.3% UP Although confidence is improving and consumers
Total
Sales sales byby
value 3.3% UP
ex-fuel value
Sales ex-fuel by value
3.4%
3.4%
UP
UP
say they feel better off, there is ‘a slight decoupling
Sales
Food byex-fuel
valueby value 3.4%
4.3% UP
UP between improved household finances and
Food by value
Food by value
4.3%
4.3%
UP
UP
spending intentions’ according to the authors
Non-food by value 3.1% UP with 70% of consumers planning to cut back on
Non-food by value 3.1% UP
Non-food
Clothing by value 3.1%
1.1% UP
UP spending in the next three months.
Clothing 1.1% UP
Clothing 1.1% UP Despite falling inflation, a resilient job market
Footwear & leather goods −7.4% DOWN
Footwear & leather goods −7.4% DOWN and wage growth and the reduction in national
Footwear
Household&goods
leather goods −7.4% DOWN
Household goods
−0.5%
−0.5%
FLAT
FLAT
insurance leading to improved finances, especially
Household
Furniture & goods
lighting −0.5%
−7.6% FLAT
DOWN for the 25 to 44 age group, confidence is still
Furniture & lighting −7.6% DOWN lacking with the authors pointing to a ‘spending
Furniture
Electrical & lighting
appliances −7.6%
−1.6% DOWN
FLAT
Electrical appliances −1.6% FLAT hesitancy’ among consumers, especially for big-
Electrical
Hardware,appliances
paint and glass −1.6%
7.7% FLAT
UP ticket items.
Hardware, paint and glass 7.7% UP
Hardware, paint and
Sports equipment, glass
games 7.7% UP Spending priorities vary across age groups, with
Sports
and toysequipment, games −1.5%
−1.5%
DOWN
DOWN 18 to 24 year-olds favouring health, wellbeing and
Sports
and toysequipment, games
and toys
−1.5% DOWN clothing, 25 to 34 year-olds pet food and care and
Watches & jewellery −5.0% DOWN
Watches & jewellery −5.0% DOWN home improvements and 35s and over thinking
Watches & jewellery −5.0% DOWN about holidays once their children are taken care
Table: Shares magazine • Source: Office for National Statistics
Table: Shares magazine • Source: Office for National Statistics of, according to the survey. [IC]
Table: Shares magazine • Source: Office for National Statistics

News
FTSE 100 finally joins the new-highs

club despite being unloved for years
Big banks, energy and defence stocks gains of 20% and 22%, and insurer Beazley (BEZ)
have helped lift the index in 2024 whose shares are up 28% this year.
Also making a strong contribution are industrial
A
fter almost closing at a new high in stocks, in particular aerospace and defence
early April, the UK’s blue-chip FTSE 100 companies, with engine-maker Rolls-Royce (RR.)
has finally made it into the ranks of extending 2023’s stellar run with a further 38%
indices hitting new all-time highs thanks gain this year and BAE Systems (BA.) racking up
to a 4.5% gain since the start of January. a 19% gain as geopolitical tensions continue to
On 22 April the index reached its highest ever unnerve investors.
close and on 23 April it moved through its previous Energy companies BP (BP.) and Shell (SHEL)
intra-day high. are two of the more heavyweight contributors,
The UK clearly isn’t in the same league as the both being top 10 stocks in the index, with gains
US, where the S&P 500 has notched up no fewer of around 13% apiece thanks to higher oil prices,
than 20 new life-highs so far in 2024, but it is still but selected consumer stocks have done well this
a notable achievement for a market which global year with Associated British Foods (ABF), Flutter
investors have shunned pretty much since the Entertainment (FLTR), Intercontinental Hotels
Brexit vote in 2016. Group (IHG) and Next (NXT) all racking up double-
In terms of sector contributions, banks and digit increases.
general financials have been a big support for This is clearly a stock-picker’s market, however, as
the index this year with Barclays (BARC) and not all financial, industrial, commodity or consumer
NatWest (NWG) among the top five performers up stocks have done well – the bottom reaches of
24% and 29% respectively. the index include Mondi (MNDI), Ocado (OCDO),
They are joined by investment firms FTSE
Prudential (PRU), Reckitt 100(RKT) and Rio
Benckiser
Intermediate Capital (ICG) and 3i Group (III) with Tinto (RIO). [IC]
September 2007 2010/11

FTSE 100 March 2000
Dot-com bubble Run on
7,000
European
begins to burst Northern Rock 6,000 crisis
debt
7,000
5,000
6,000 October 1987
4,000 Black Monday crash
5,000
October 1987 3,000 February 2020
4,000 Black Monday crash Covid crash begins
2,000
3,000 August 2015
China crisis1,000
sparks
2,000 global sell-off
September 2008 0 June 2016
1,000 Lehman Brothers Brexit
1985 vote 1990 199
collapses
0 Chart: Shares magazine • Source: LSEG
1985 1990 1995 2000 2005 2010 2015 2020
Chart: Shares magazine • Source: LSEG

News
United Airlines soars on upgrades

despite Boeing-related hit
The Chicago-headquartered $200 million hit from the grounding
airline first-quarter results of Boeing planes after a cabin
beat expectations panel below out on a flight United Airlines
Moving operated by rival Alaska
($)
Over the past six
months United Airlines
HIGHER Airlines.
The company forecast 50
(UA:NASDAQ) shares have earning between $3.75
gained over 45% as the to $4.25 per share in the
40
US airline managed to shrug off second quarter, ahead of Wall Street
negative news concerning delayed estimates of approximately $3.76
deliveries and canceled flights per share. Jan Apr
related to safety issues at aircraft United has also reiterated its 2024
maker Boeing (BA:NYSE). full year earnings forecast of
On the day of its first quarter between $9 and $11 per share. Chart: Shares magazine • Source: LSEG
results (16 April) United Airlines The company is seeing robust
shares gained nearly 20% at one demand for domestic and
point hitting the $50 mark as the transatlantic flights and a notable new narrow-body planes, down from
US airline upgraded guidance. This uptick in business travel. 101 it said it had expected at the
took the limelight rather than the United said it will receive just 61 beginning of the year. [SG]
Ocado shares wobble after Ocado

M&S relationship turns sour (p)
Legal action and calls to for the online grocer. 600

abandon London listing The recent positive trading
preoccupy the online grocer update comes after a lengthy
400
period of disappointing
Shares in Ocado performance, and for
Jan Apr
(OCDO) have fallen Marks & Spencer 2024
by 20% over the the targets set out
past month as when it agreed the Chart: Shares magazine • Source: LSEG
the online grocer tie-up with Ocado
continues with in 2019 have not shareholders to abandon its London
its fractious been met. listing for New York.
relationship with Ocado has Although Ocado’s innovative
joint venture partner threatened legal action technology has global potential and
Marks & Spencer (MKS). over an outstanding, revenue growth is on an upward
Despite reporting average performance- trajectory, its shares are far
orders per week of 414,000, an 8.4% dependent instalment in the off their peak of around £28
increase compared with the first £750 million agreement, DOWN during the pandemic.
quarter of 2023, and a 10.6% rise in and according to recent in the
DISCLAIMER: The author of
revenue for Ocado Retail for the 13 media reports the online dumps this article (Sabuhi Gard)
weeks to 3 March, trouble is brewing grocer is under pressure from owns shares in Ocado.

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News: Week Ahead
UK Retail giant Next sees strong first-

UPDATES quarter full-price sales increase
OVER THE
NEXT 7 The firm has set the bar high although growth is expected to moderate
DAYS With shares in UK high-street
bellwether Next (NXT) trading close Next
FULL-YEAR RESULTS to all-time highs above £90 despite (p)
29 April: Jadestone the recent pull-back in markets, there
Energy, Christie,
is a fair bit riding on its upcoming first-
One Media, Biome 8,000
Technologies
quarter trading update (1 May).
30 April: Card Factory When it posted full-year results in
1 May: HSS Hire late March, the firm said it had been
6,000
‘a long time since we started a year in
FIRST-HALF RESULTS a more positive frame of mind’ after a Jul Oct Jan Apr
26 April: Jupiter Fund 2023 2024
Management
better-than-expected performance in
2 May: Smiths News 2023 when it delivered its highest ever Chart: Shares magazine • Source: LSEG
levels of revenue and profit.
‘Perhaps more encouragingly, we customer chooses to spend their
enter the financial year with new money.
avenues of growth along with a cost For the first quarter as a whole,
base that feels under control,’ the the company has guided for full-
FIRST-QUARTER company added. price sales up 5% against a weak first
RESULTS Key to the firm’s success is the quarter last year followed by flat sales
30 April: St James’s NEXT brand itself, the ‘jewel in the in Q2 against a strong comparison
Place crown’, which this year management last spring (sales up 6.9%) due to
2 May: Shell, Standard has vowed to ‘take to another level’ unusually warm weather through May
Chartered through greater breadth of choice and into June.
TRADING ‘more aspirational levels of quality’. For the full year, full-price sales
ANNOUNCEMENTS The clothing sector has positive are expected to grow by 2.5% with
30 April: Elementis, tailwinds as clothes are an essential the second half being much more
Howden Joinery, Rotork rather than a discretionary purchase, balanced in terms of quarterly
1 May: Haleon, Next the only question being where the performance. [IC]
What the market

What the market
expects
What thefrom Next
market
expects from Next
expects from Next
Year Year
Year
to Jan Year
to Jan
Year
to Jan Year
to Jan
2025
to Jan 2026
to Jan
2025 2026
Sales 2025
£5.8bn 2026
£6.0bn
Sales £5.8bn £6.0bn
Sales
Earnings £5.8bn £6.0bn
Earnings 601p 646p
per share 601p 646p
Earnings
per share 601p 646p
per share
Table: Shares magazine • Source: Stockopedia

News: Week Ahead
All eyes on sales momentum for US

UPDATES
Eli Lilly's obesity drug Zepbound OVER THE
Demand for the group's products NEXT 7
may exceed supply again this year Eli Lilly
Pharmaceutical giant Eli Lilly ($) DAYS
(LLY:NYSE) is due to report first- QUARTERLY RESULTS
quarter earnings before the market 26 April: Exxon Mobil,
600 AbbVie, Chevron, HCA,
opens on 30 April. Wall Street is
Colgate-Palmolive,
expecting EPS (earnings per share) 400 Phillips 66, Aon
of $2.54 which represents a 57% 29 April: NXP,
increase compared with the first Jul Oct Jan Apr
Welltower, Arch Capital,
2023 2024
quarter of 2023. Global Payments,
All eyes will be on sales momentum Chart: Shares magazine • Source: LSEG
ON Semiconductor,
in Lilly’s diabetes treatment Mounjaro Everest, Domino’s
and obesity treatment Zepbound of certain Mounjaro doses given Pizza
following the latter’s launch in significant demand, which is expected 30 April: Eli Lily, Coca
Cola, McDonalds,
November 2023 after which it raked to impact volumes.
Stryker, Mondelez,
in $176 million in the final few weeks The company gave a positive PayPal, Ecolab, Gartner
of the year. outlook and forecast 2024 sales in 1 May: Mastercard,
The strong debut of Zepbound and the range of $40.1 billion to $41.6 Uber Tech, Pfizer,
continued success of the company’s billion with adjusted EPS between DoorDash, Estee
diabetes treatment Mounjaro helped $12.2 and $12.7, slightly ahead of Lauder, MetLife, AIG,
the company report a 28% increase in consensus estimates. Kraft Heinz, Allstate,
fourth-quarter sales to $9.35 billion, Chief financial officer Anat Yum!Brands, Verisk,
beating consensus estimates. Ashkenazi said she expected revenue ebay, Etsy, Dayforce
2 May: Apple, Linde,
Mounjaro generated revenue of to accelerate in the second half as
ConocoPhillips, Amgen,
$2.21 billion compared with just $279 new production capacity of Zepbound Booking, Cigna,
million in the same period of 2022. and Mounjaro comes on stream. Datadog, Moderna
Capacity issues will be a key area of Overall, the company said demand
interest for investors after Lilly flagged was likely to outstrip supply again in
intermittent delays in fulfilling orders 2024. [MG]
What
What the
the market
market
What thefrom
expects market
Eli Lilly
expects
expects from Eli Lilly
from Eli Lilly
FY FY
FY
2024 FY
2025
FY
2024 FY
2025
2024 2025
Sales ($bn) 41.4 51.5
Sales ($bn) 41.4 51.5
Sales ($bn)
EPS ($) 41.4
12.5 51.5
18.5
EPS ($) 12.5 18.5
EPS ($) 12.5 18.5
Table: Shares magazine • Source: Zacks
Table: Shares
Investment magazine
Research, • Source: Zacks
Refinitv
Table: Shares
Investment magazine
Research, • Source: Zacks
Refinitv
Investment Research, Refinitv

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News: Week Ahead
UK housing market springs a surprise

but all eyes still turned to the US
Attention on inflation and jobs data after Fed bigger, detached houses to
official cedes the possibility rates could rise sell up.
The week started with positive UK economic news However, the market’s
as the April Rightmove (RMV) house price survey focus is likely to be firmly on US
showed asking prices rising at 1.7% on last year, data ahead of the Federal Reserve
their biggest jump in 12 months, driven by more meeting next Thursday 1 May and its impact
top-end properties coming to market. on forward guidance.
The average price of homes put up for sale Shortly after Shares goes to press, March’s PCE
reached £372,324, less than £600 short of the (personal consumer expenditure) price index –
record level registered last May, as a revival of one of the Federal Reserve’s key inputs when it
activity in the market prompted more owners of comes to deciding whether or not to cut interest
Macro diary 25 April to rates – is released.
Macro
1 diary 25 April to
May 2024
Macro diary 25 April to This is followed next week by various purchasing
1 May 2024 managers’ surveys along with jobs figures, which
1 May 2024 if they continue to surprise to the upside will
Date Economic Event Previous
Date Economic Event Previous deepen the gloom over the prospect for rate cuts.
25-Apr
Date US Q1 GDP Event
Economic 3.4%
Previous As predicted, there was a good deal of chatter
25-Apr US Q1 GDP 3.4% last week around comments from senior central
UK April GfK
25-Apr US Q1
Consumer GDP 3.4%
-21 bank officials, in particular New York Fed President
UK April GfK
Confidence
Consumer
UK April GfK -21 John Williams, who said the US benchmark
Confidence
Consumer -21 interest rate was ‘in a good place’ and there was
US March Core PCE
26-Apr Confidence 2.8% no urgency to cut any time soon.
Price
US IndexCore PCE
March
26-Apr 2.8% When pressed as to whether rates could
Price Index
US March Core PCE
26-Apr Eurozone April 2.8% actually rise rather than fall, Williams didn’t rule
29-Apr Price Index -0.3
Business Climate
Eurozone April
29-Apr -0.3 out the possibility although he admitted it wasn’t
Business
EurozoneClimate
April
29-Apr Eurozone April -0.3
-8.8
his base case.
Business Sentiment
Industrial
Eurozone Climate
April The notion that US rates are not just set to
-8.8
Industrial
Eurozone Sentiment
April stay higher for longer but could potentially rise if
UK March Mortgage -8.8
30-Apr Industrial £1.5bn inflation isn’t brought under control was enough
UK March Sentiment
Lending Mortgage
30-Apr £1.5bn to send the S&P 500 index down 5%, marking its
Lending
UK MarchApril
Eurozone Mortgage
CPI 2.4%
30-Apr
Lending April CPI
£1.5bn worst week since October 2022. [IC]
Eurozone 2.4%
US April Chicago PMI 41.4
Eurozone
US April CPI
April Chicago PMI 2.4%
41.4 Next
Next Central
Next Central Bank
Central Bank Meetings
Bank Meetings &
Meetings &
&
UK April
01-May US April
April Chicago
Manufacturing
UK PMI
PMI
49.9
41.4 Current
Current Interest
Current Interest Rates
Interest Rates
Rates
01-May 49.9
Manufacturing PMI
UK April
US AprilISM
01-May 49.9
50.3
Manufacturing
Manufacturing
US April ISM PMI Date
Date Event
Event Previous
Previous
Manufacturing
50.3 Date Event Previous
US April
US AprilADP
ISM Non- 01-May US Federal Reserve 5.5%
184k
50.3 01-May
01-May US
US Federal
Federal Reserve
Reserve 5.5%
5.5%
Farm
US Jobs
Manufacturing
April ADP Non-
184k 09-May Bank of
of England
England 5.25%
Farm Jobs 09-May
09-May Bank
Bank of England 5.25%
5.25%
US
US March JOLTS
April ADP Non-Job
8.75m
184k 22-May European Central
Central Bank 4.0%
Openings
Farm
US JobsJOLTS Job
March 22-May European
8.75m 22-May European Central Bank
Bank 4.0%
4.0%
Openings
US March JOLTS Job
8.75m
Table: Shares magazine • Source: Morningstar, central bank Table: Shares
Table: Shares magazine
magazine •• Source:
Source: Morningstar,
Morningstar, central
central bank
bank
websites
Openings Table: Shares magazine • Source: Morningstar, central bank
websites
Table: Shares magazine • Source: Morningstar, central bank websites
websites
websites
Table: Shares magazine • Source: Morningstar, central bank
websites

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Great Ideas: Investments to make today
Buy underappreciated Gaming

Realms before the market
recognises its true worth
Licensing revenue grew 20% year over
year in the first two months of 2024
Gaming Realms
(GMR:AIM) 31.6p
Market cap: £93.4 million
F
or the uninitiated, Gaming Realms
(GMR:AIM) is a leading business-to-
Gaming Realms
business licensor and distributor of games (p)
to the regulated gaming market.
The company owns the IP (intellectual property)
40
to the Slingo brand, one of the most popular
formats of games played online.
As the name suggests the format is a mash-up of 30
slots and bingo. The game in its various formats has
been played billions of times since its invention in 20
the US in the 1990s.
The company’s other significant asset is an
internally-built remote RGS (remote game server) 10
which allows it to distribute and integrate games to
third parties. 0
After purchasing the Slingo IP in 2015, Gaming 2020 2021 2022 2023 2024
Realms began to commercialise the game by
licensing it to gaming companies. Chart: Shares magazine • Source: LSEG
Starting from a low base, growth has been
impressive. Revenue has grown at a CAGR Shares believes the business is only in the
(compound annual growth rate) of 30% per year foothills of its global growth journey. Past
and is expected to reach £27.3 million in 2024 investment in the SAAS (software-as-a-service)
while net profit has grown at a CAGR of 44% a year. platform and strong relationships with gaming
operators provide a solid base to convert an
Gaming Realms financial forecasts increasing amount of revenue growth into profit
and cash flow as costs remain relatively fixed.
Peel Hunt’s leisure analyst Ivor Jones projects
2024 2025 revenue to grow around 14% per year and pre-tax
profit to more than double over the next three
Sales (£m) 27.5 31.3
years. The business is forecast to generate almost
EPS (p) 3.3 4.3
£30 million of free cash flow from 2023 to 2026.
The shares trade on a lowly 2024 PE (price-to-
earnings) ratio of 9.5 times based on Jones’ EPS
Table: Shares magazine • Source: Peel Hunt
(earnings per share) estimate of 3.3p which looks

REVENUE GROWTH BY TERRITORY

Scaling in every major market
+22% +21%
2022
2023
+214% +33%
+159%
+61% +16%
USA UK Canada ROW Italy Spain Netherlands
Source: Gaming Realms
like a bargain relative to the growth prospects. The second growth lever is to increase the
With no debt and an estimated £14.5 million of number of gaming operators. From a humble start
cash on the balance sheet at the end of 2024, Jones in 2018 serving four operators, today the company
says, ‘it is therefore relatively low risk and well- has relationships with 180 operators.
placed, in our view, to contemplate returning capital The company added 44 licensees in 2023
to shareholders’. including Bet365, and the state lottery in
The cherry on the cake is the roughly £31 million Ontario, Canada.
pounds of tax losses carried forward which may Most gaming companies run global businesses
tempt a corporate bidder out of the woods. and this represents the third growth lever as
Gaming Realms’ management is executing its operators introduce Slingo-style games across a
growth plan without seemingly missing a beat and greater number of territories.
is ably steered by chief executive Mark Segal and The US market is now the largest territory for
executive chair Michael Buckley, joint co-founders the company, and US revenue grew by 22% in
of the business. 2023. The US is expected to see 61% online casino
It is also noteworthy that Mark Blandford, growth from 2024 to 2028 according to industry
gambling industry veteran and co-founder consultants Eilers & Krejcik Gaming.
of SportingBet (now part of Entain (ENT)), is a Gaming Realms is starting to scale in multiple
shareholder and non-executive board director. markets outside the US and generated 214%
revenue growth in Canada and 159% in Italy
MULTIPLE GROWTH DRIVERS in 2023.
There are three clear growth levers available to the Looking ahead to 2024, the company is expected
company. The first is developing new games to build to go live in Greece, South Africa, West Virginia and
on the number of games it currently distributes. In British Columbia among other territories.
2023 Gaming Realms grew the number of games In summary, we believe Gaming Realms is
by 15% to 75 and the number of unique players entering the sweet spot of its growth trajectory
increased by 24%. whereby profits and margins expand faster than
Not all the games available on the platform have revenue leading to an increase in shareholder value.
been licensed by all the operators, which represents Savvy investors should consider taking advantage
another layer of growth on top of developing before the market fully appreciates this lower-risk
new games. investment opportunity. [MG]

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t may have beaten a hasty retreat from recent 32
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28
gold prices are still forecast in many quarters
to make further gains from here. 26
For investors concerned about geopolitical and
2021 2022 2023 2024
economic risk, as inflation shows signs of being
more entrenched and a divisive US presidential Chart: Shares magazine • Source: LSEG
election looms, 2024 has seen the precious metal’s
safe haven credentials underlined. You don’t need of economic or geopolitical strife, when inflation
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without having to worry about storage or any other These factors lie behind some bullish forecasts
associated hassle. Over a three-year period, the from investment banks with Goldman Sachs
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Great Ideas Updates
We’re sticking with Dr Martens

despite the latest profit warning
The company’s troubles are of its own making and are fixable
Dr. Martens
(DOCS) 72.1p
Loss to date: 21.6%
I
n mid-December 2023 we said the knock-
down share price of iconic footwear brand Dr.
Martens (DOCS) was too tempting to resist
despite the company delivering four profit to step down at the end of the financial year to be
warnings. replaced by current chief brand officer Ije Nwokorie.
Our rationale was simple – either the self-inflicted Nwokorie was previously at Apple
operational issues would be fixed by the current (APPL:NASDAQ) where he led the firm’s D2C (direct-
management or the business would be taken over to-consumer) business.
by an opportunistic predator who recognised the
untapped value of the brand. WHAT SHOULD INVESTORS DO NOW?
It is clearly disappointing to see another profit
WHAT HAS HAPPENED SINCE WE SAID TO BUY? warning and a change of leadership at a time when
The shares were trading steadily and ticked into the the company is trying to rebuild shareholder trust
money briefly before plunging 30% on 16 April after and confidence.
the company released yet another disappointing It was never going to be a smooth ride for
trading update. shareholders following the volatile debut of the
Management confirmed results for the full shares since listing. However, we are keeping faith
year to the end of March 2024 would be in line with our original thesis and are prepared to ride the
with market expectations, but took an axe to its ups and downs in the shares in the belief the brand’s
planning assumptions for 2025 after revealing the value will ultimately be realised. [MG]
US wholesale division’s Autumn/Winter order book
– which makes up the majority of the firm’s second- Dr. Martens
half trading – was significantly down year-on-year.
(p)
Consequently, the board’s base-case outcome for
the 2025 financial year is a £20 million impact on 150
pre-tax profit assuming there are no ‘meaningful’
in-season re-orders.
Yet investors seemed to focus not on the base 100
case but the worst-case scenario which envisaged
pre-tax profit falling to around a third of the level 50
achieved in 2024.
The firm said increased cost pressures were
unlikely to be mitigated by price hikes, while most 0
of the £15 million additional inventory storage costs Jul Oct Jan Apr
incurred in 2024 were now expected to repeat 2023 2024
in 2025.
Chief executive Kenny Wilson said he intended

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Feature: Corporate spin-offs
Are corporate spin-offs

a good hunting ground for
profitable investments?
The sizeable gap between winners and
losers means due diligence is crucial
Performance of selected
T
his feature explores spin-offs or de- corporate spin-offs
mergers, looking at the rationale for
them and how they have performed, Performance
and asks if they can be a promising since
hunting ground for investors. inception
One of the UK’s largest recent spin-offs was Company / Parent Listing (%)
GSK’s (GSK) demerger of its consumer healthcare ASML / Philips 1995 30,623
division in 2022.
GSK reportedly rebuffed a £50 billion offer Experian / GUS 2006 461
from personal goods giant Unilever (ULVR) to buy AbbVie/ Abbot Labs 2012 404
the division, named Haleon (HLN), in the autumn
Burberry / GUS 2002 398
of 2021.
The GSK board instead decided to spin the Zoetis / Pfizer 2013 393
business off to its own shareholders and the shares Mondelez / Kraft
began trading at 330p per share on 18 July 2022, 2001 234
Heinz
valuing the business at roughly £31 billion, way
Mondi / Anglo
below Unilever’s offer. American
2007 172
In a twist of fate, Unilever’s new management
team has announced it now wants to spin off its Indivior / Reckitt
2014 106
Benckiser
ice cream division (19 March) as the fast-moving
consumer goods group looks to accelerate its growth Paypal / Ebay 2015 81
plan aimed at increasing shareholder returns. Philip Morris Int'l /
2008 78
Altria
YET TO DELIVER
Wickes / Travis
Haleon was the largest new listing on the London Perkins
2021 −38
Stock Exchange since mining group Glencore (GLN)
came to the market in May 2011 with a market cap Table: Shares magazine • Source: Google
of around £37 billion, according to Refinitiv data.

Almost two years on from their debut, Haleon The aim of a spin-off is to
shares trade close to their listing price but the increase the share price of
combined market cap of Haleon and GSK today is
approximately a tenth below where it was at the the parent and create greater
time of the separation meaning investors have so shareholder value for both
far seen no benefit from the demerger.
That isn’t how demergers are supposed to work,
but it does demonstrate the wide dispersion in
sets of shareholders
”
outcomes when companies spin off parts of their GUS no longer exists as a company as its Argos
business. catalogue retail division now resides within
One of the most successful spin-offs of all time is supermarket group Sainsbury’s (SBRY) and its
advanced semiconductor equipment maker ASML iconic fashion brand Burberry (BRBY), which
(ASML:AMS), which was hived off from its Dutch started life as a mail-order business in Manchester
parent Philips (PHIA:AMS) in 1994. over a century ago, is separately listed.
Since listing, ASML shares have increased 367- One of the worst-performing demergers in
fold which is equivalent to a compound annualised recent times is home improvement retailer Wickes
return of 22.6% per year. (WIX), which was spun out of Travis Perkins (TPK)
Global information services company Experian in April 2021.
(EXPN) is one of the best-performing UK de- The share prices of both companies have
mergers, delivering a share price return of 10% suffered due a slowdown in the home
per year since it spun out of GUS (Great Universal improvement market with the former down 38%
Stores) in 2006. and the latter down by 50% since the split.

WHY SPIN OFF IN THE FIRST PLACE? NOTABLE US AND UK SPIN-OFFS

Where a company operates a conglomerate The US market has a rich history of spin-offs,
structure with a mishmash of unrelated businesses, from the break-up of AT&T (T:NYSE) or ‘Ma
the value of the group can be less than the sum of Bell’ as it was known in the 1980s to eBay’s
its parts as investors often apply a conglomerate (EBAY:NASDAQ) split with PayPal (PYPL:NASDAQ),
discount. Altria’s (MO:NYSE) divestment of Philip Morris
The aim of a spin-off is to increase the share International (PM:NYSE) and Abbott Laboratories
price of the parent and create greater shareholder (ABT:NYSE) spinning off its biopharma business
value for both sets of shareholders. AbbVie (ABBV:NYSE).
Demerging a subsidiary business allows investors More recently, US pharmaceutical firm Johnson &
to get a clearer picture of its true value, which can Johnson (JNJ:NYSE) followed in GSK’s footsteps by
subsequently lead to a higher valuation over time spinning out its own consumer healthcare division
than its implied value inside the parent company. Kenvue (KVUE:NYSE) in August 2023, generating
There is an argument to suggest demerged $13.2 billion in cash for the parent.
businesses tend to be better managed as the The trend to demerge healthcare
directors are responsible for their own profit businesses continues apace. Diversified
and loss account and are incentivised to technology firm 3M (MMM:NYSE) spun off
create shareholder value. its healthcare unit Solventum (SOLV:NYSE)
Unshackled from the parent, a demerged in March 2024. The company operates four
business is free to follow its own path and divisions ranging from wound care, dental
drive its own destiny, potentially becoming solutions, purification, and filtration to
more innovative and driving faster growth. hospital software.

In October 2023, Corn Flakes and company Marriott International

Special K cereal maker Kelloggs (MAR:NYSE) in the early 1990s.
(KLG:NYSE) spun out its Pringles Marriott’s board decided to de-
and Pop-Tarts snacks business into merge the asset-heavy property
a new company called Kellanova business from the capital-light
(K:NYSE). property management operation,
US industrial giant GE (GE:NYSE) and after poring over the 400-odd page prospectus
has carried out two spin-offs. In 2023 it distributed Greenblatt spotted something interesting.
a pro-rata dividend which entitled holders of GE The debts of the company backing its properties
common stock to receive a distribution of one were held by a subsidiary of the parent company
share in GE HealthCare (GEHC:NASDAQ) for every which itself was debt free.
three shares of GE held. Greenblatt estimated the assets were worth $6
Earlier this month, GE distributed another pro-rata per share compared with the $4 per share asking
dividend which entitled holders of GE common stock price, meaning the company was selling for less
to receive a distribution of one share in GE Vernova than its tangible worth: four months later the
(GEV:NYSE) for every four shares of GE held. shares were trading at $12.
Following these spin-offs, GE operates as GE However, not all spin-offs make great
Aerospace, a global provider of aircraft engines, investments. A Harvard Business Review study
systems and services with revenues exceeding $30 analysed 350 public spin-offs valued at more than
billion, but it retains its original ticker. $1 billion between 2000 and 2020.
In the UK, industrial group Melrose (MRO) The results were surprising ─ the study found half
carried out a similar exercise in 2023, spinning of the companies failed to create any shareholder
off its automotive components business Dowlais value within two years of separation while 25%
(DLS) as a separate entity allowing it to concentrate destroyed a ‘significant’ amount of shareholder
on aerospace activities. value. The average separation delivered just a 5%
increase in combined market cap.
DO SPIN-OFFS MAKE MONEY FOR INVESTORS? The contrast between the best and worst
Often spin-offs perform poorly shortly after listing performers was stark. Top-quartile demerger
as investors receive relatively few shares, meaning performed very well with their combined market
they have to buy more to build up a meaningful cap up 75% two years after separation, whereas
holding. Lack of broker coverage and familiarity companies in the bottom quartile destroyed value
with the business mean they are more likely to sell by as much as 50% of the combined market cap.
the ‘free’ shares and move on. The authors of the study believe the key to
Hedge fund investor and author Joel Greenblatt success is creating a clear focus on the ‘go-forward’
believes these dynamics can present profitable equity story and targeting achievable financial
opportunities to buy underappreciated and targets before separation is even announced.
undervalued assets on the cheap. This helps cement a clear roadmap for creating
One of Greenblatt’s biggest successes, as shareholder value.
discussed in his book You can be a Stock Market In conclusion, spin-offs can be a profitable
Genius, was investing in the spin-off of property hunting ground, but good judgment and
fundamental research is needed to find the few
that go on to create sustainable shareholder value.
In other words, just because a demerged
company is initially unloved or ignored by investors
is no guarantee of future success.
By Martin Gamble Education Editor

DIVIDEND
MACHINES
The companies which
reward shareholders
like clockwork
I
nterest rates are expected to stay higher for growing dividends (it doesn’t work if a company
longer to combat the sticky inflation which is a “fair weather” payer). A long track record of
remains a threat to investors’ hard-earned dividends suggests that a company is committed to
wealth and purchasing power. During periods sharing their success with investors and, perhaps
of high inflation, it is crucial to invest in companies just as importantly, has a business that can stand
that possess pricing power, because these firms the test of time and economic cycles.’
can pass on increased costs to customers, enabling
them to maintain profit margins and generate the
robust cash flows that support a reliable and rising ARISTOCRATS & KINGS
dividend to shareholders.
Dividend income has long been known as a A useful starting point for spotting companies
powerful tool for compounding wealth. No less a with pricing power is to look for those with a
figure than John D. Rockefeller once said: ‘Do you track record of consistent earnings growth and
know the only thing that gives me pleasure? It’s to shareholder distributions, many of which are found
see my dividends coming in.’ among the so-called ‘dividend aristocrats’, firms
And as Ben Lofthouse, head of global equity that have consistently raised their dividends for at
income at Janus Henderson, explains: ‘The growing least 25 years.
dividend streams from equities are one of the best The US dividend aristocrats are a select group
ways to protect investors’ income from the ravages of S&P 500 index-listed corporations that have
of inflation over the long term. That only holds raised the shareholder reward for a quarter of a
true though if the companies are committed to century or more. As of 28 March 2024, there were
sharing their growth with investors, and paying and 67 constituents in the S&P 500 Dividend Aristocrats

index with top 10 constituents by index weight
including construction equipment giant Caterpillar
(CAT:NYSE), discount retailer Target (TGT:NYSE),
engineering services stalwart Emerson Electric
(EMR:NYSE) and food processor-to-commodities
trader Archer-Daniels-Midland (ADM:NYSE).
Other aristocrats include retail behemoth
Walmart (WMT:NYSE), energy giant Chevron
(CVX:NYSE) and drinks colossus Coca-Cola
(KO:NYSE), not to mention industrial and
healthcare company 3M (MMM:NYSE) and fast
food chain McDonald’s (MCD:NYSE).
An even more elite group are the ‘dividend
kings’, ultra-rare stalwarts of the dividend scene
that have raised the shareholder reward for at current rally, but it could be one for investors
least 50 years, although many of these kings to think about. Microsoft is well positioned to
are mature businesses generating pedestrian benefit from the investments it has made in cloud
growth. Their number includes American States computing and AI (artificial intelligence). Coca-
Water (AWR:NYSE) and Dover Corp (DOV:NYSE), Cola has a higher yield and a long track record
which have each hiked dividends for pushing on of dividend growth, too. The company has been
70 successive years, as well as consumer goods focused on making itself less capital intensive whilst
Goliath Procter & Gamble (PG:NYSE) and motion broadening out its product offering.’
and control technologies specialist Parker Hannafin Luc Plouvier, senior portfolio at Van Lanschot
(PH:NYSE) on 67 years of growth apiece, and the Kempen, highlights the attractions of another
aforementioned Walmart and Coke, which have drinks name, alcoholic beverages company Diageo
increased the dividend for at least half a century. (DGE). ‘It has a broad range of world-famous
That’s no mean feat when you consider the period brands like Smirnoff vodka, Captain Morgan rum,
spanned multiple recessions, the bursting of the Johnnie Walker whisky, Baileys Irish cream, and
dot.com bubble, the Great Financial Crisis and the Tanqueray gin and sells its products in more than
Covid pandemic. 180 countries. The business has high profit margins,
Lofthouse points out that Microsoft high returns on invested capital, and a strong
(MSFT:NASDAQ) has become a dividend aristocrat balance sheet. Over the past two decades, Diageo
over the last decade. ‘The yield is low after the has been able to grow 4% to 6% per annum, in line
Investment trust STS Global Income & Growth

(STS) has owned dividend aristocrat ADP ADP
(ADP:NASDAQ) for several years. This high-quality
software business provides outsourced human A high-quality
capital management services to businesses
including payroll, tax, employee benefits and aristocrat
insurance.
STS Global Income & Growth’s manager James
Harries says: ‘The impetus to outsource these
functions grows as complexity increases giving a
long runway for growth. As a company with limited
capital requirements and high returns on capital,
ADP can both invest sensibly in the business to
fund innovation and entrench their competitive
advantages, as well as pay a growing dividend. The
shares have delivered an excellent return balanced
between income and capital growth and currently
yield 2.3% on a prospective basis.’

Selected UK dividend machines (stocks which have increased their
dividends in at least nine out of the last 10 years)
DPS CAGR (10 years)
22.4%
20%
11.1%
10 8.3%
7.1% 6.5% 6.1% 5.5%
4.2%
2.9% 2.4%
London DCC Coca-Cola Bunzl RELX Halma Croda Sage BAE United
Stock HBC Systems Utilities
Exchange
DPS = dividend per share CAGR = compound annual growth rate

Chart: Shares magazine • Source: Stockopedia
Selected US dividend machines (stocks which have increased their

dividends in at least nine out of the last 10 years)
DPS CAGR (10 years)
39.0%
20% 17.4%
15.4% 14.1%
8.4% 6.8% 6.4%
3.0% 2.7% 2.6%
Broadcom United Mastercard Visa Microsoft JPMorgan Eli Lilly Apple Procter & Exxon
Health Chase Gamble Mobil

Selected European dividend machines (stocks which have increased

their dividends in at least nine out of the last 10 years)
DPS CAGR (10 years)
24.2%
20%
13.0%
10.3%
10 7.2% 6.5%
4.9%
1.9% 1.7% 1.3% 0.6%
ASML Sika Novo SAP RELX Schneider Sanofi Roche Nestle Novartis
Nordisk Electric


Kepler Partners analyst Ryan Lightfoot-Aminoff points out
that investment trusts are well suited to becoming dividend CLAVERHOUSE
aristocrats due to their ability to hold back some revenue
each year to support dividends in more challenging periods. One to consider
‘This was particularly beneficial during the covid pandemic
when, although dividends were slashed, numerous trusts
were able to fall back on their reserves to maintain payouts,’
says Lightfoot-Aminoff, who believes JPMorgan Claverhouse
(JCH) is worth highlighting ‘as an example of a great dividend
track record, having recently achieved its 50-year milestone
of growing its dividends. More impressively, the annualised
dividend growth of 8.8% has beaten both UK inflation of
4.9% per annum and the market’s dividend growth of 6%
per annum since 1972. Managers William Meadon and
Callum Abbot are fundamental stock pickers, but are always
mindful of risks, adopting a barbell approach to building the
portfolio. The trust’s historic yield is circa 5%, though the
board has indicated it will raise interim dividends by 3% over
2023 levels. JPMorgan Claverhouse has steadily built revenue
reserves to support the dividend in leaner times, with over
73% of 2023’s dividend in reserve to support growth going
forward. As such, we believe the attractive, inflation-busting
dividend is well supported and should appeal to investors.’
with the global spirits market. Because there are no

substantial reinvestment needs, Diageo pays out a
predictable and growing dividend. It complements
these dividends by buying back their shares in the
open market.’
TAP INTO
US DIVIDENDS FOR UK INVESTORS
DIVIDEND MACHINES
Most US shares can be held in a dealing account,
A fervent fan of dividend growth investing is ISA or SIPP (self-invested personal pension).
legendary US fund manager Peter Lynch. In his For any account except a SIPP, you will need to
book ‘Beating the Street’, Lynch remarks that ‘the complete a W-8BEN form to be able to invest in
dividend is such an important factor in the success a US share. The form can typically be completed
of many stocks that you could hardly go wrong by online. Tax treaty arrangements between the US
making an entire portfolio of companies that have and UK mean that the usual 30% withholding
raised their dividends for 10 or 20 years in a row.’ tax on US dividends is halved to 15% for
Taking our cue from the feted American investor, investments in a dealing account or ISA once a
Shares has used Stockopedia to screen for dividend W-8BEN form is completed.
champions across the UK, US and European markets A W-8BEN form is not required for US
that have grown their dividends in at least nine of investments held within a SIPP as the relevant
the last 10 years, which captures companies that US authority, the IRS, recognises SIPPs as a
may have undergone the briefest of Covid-induced qualifying pension scheme and all qualifying US
dividend-paying hiatuses. We outline our best ideas dividends and interest are automatically paid
below plus a tracker which offers exposure to a free of any withholding tax.
diversified list of regular dividend hikers.

ExxonMobil (XOM:NYSE) Nestle (NESN:SWX)
Share price: $118.52 Share price: CHF 93.72
Forecast dividend yield Forecast dividend yield
(source: Stockopedia): 3.2% (source: Stockopedia): 3.3%
ExxonMobil Nestle
($) (CHF)
120
100
100
50
80
0
2014 2016 2018 2020 2022 2024 2014 2016 2018 2020 2022 2024
Chart: Shares magazine • Source: LSEG Chart: Shares magazine • Source: LSEG
For investors prepared to set aside any Nestle (NESN:SWX) has built a strong track record
environmental concerns, US oil firm ExxonMobil of consistent dividend growth stretching back 35
(XOM:NYSE) is an excellent source of shareholder years. Since 1995 this global consumer defensive
rewards. Since 2019, the company estimates it has giant has never failed to increase its annual
added $10 billion to annual earnings and cash flow dividend which has grown at a compound annual
at an oil price of $60 per barrel and the plan is to growth rate of 9% a year. Given the company’s
increase this by a further $14 billion from the end strong balance sheet and high returns on capital,
of 2023 through to the end of 2027. This has been the prospects for the historical trend to continue
achieved through operational efficiencies and a looks reasonably assured. Nestle has assembled a
disciplined approach to capital investment. Global very diversified stable of global brands from Kit-Kat,
oil prices have consistently tracked higher than Milkybar and Perrier water to Maggi soups and
$60 over the last three years and the company’s Purina pet food. Growing the business organically is
copious cash generation has supported a stream a key part of Nestle’s strategic focus. The company
of share buybacks and dividends. Based on targets mid-single digit organic sales growth based
consensus forecasts, Exxon offers a 2024 dividend on investment in categories and regions with
yield of 3.2%. US firms like Exxon have faced less attractive long term growth trends. In addition,
pressure than their European counterparts to Nestle has a focus on increasing the contribution
invest in areas like renewables but the company from premium brands to drive margin expansion
has still put money into what it describes as ‘ and accelerate growth. Another leg of the strategy
lower-emissions opportunities’ and plans to is to deliver a quarter of sales from e-commerce by
allocate $20 billion to these areas by the end of 2025. Nestle spent two-thirds of its media budget
2027. However, instead of wind and solar, Exxon is on digital campaigns and acquired 308 million
prioritising areas which it perceives as a better fit first-party data records in 2023. The company says
for its skillset like lithium, hydrogen, biofuels and applying artificial intelligence to the dataset helps
carbon capture and storage. [TS] its brands reach target audiences more efficiently.
UK holders of Swiss stocks are subject to a 35%
dividend withholding tax but this can be reduced to
15% by filling out the relevant paper work. [MG]

Cranswick (CWK) SPDR S&P Global Dividend
Share price: £40.95 Aristocrats UCITS ETF (GBDV)
Dividend yield (source: Stockopedia): 2.1%
Share price: £24.00
Cranswick
(p)
SPDR S&P Global Dividend
4,000
Aristocrats
(p)
3,000
2,000 2,500
1,000
0 2,000
2014 2016 2018 2020 2022 2024

2014 2016 2018 2020 2022 2024
Meat and poultry producer Cranswick (CWK)
isn’t an obvious candidate for a feature on Income-hungry investors seeking low-cost passive
dividend growers, yet the Kingston upon Hull- exposure to the theme should consider SPDR
based company has increased its payout every S&P Global Dividend Aristocrats (GBDV), an ETF
year for more than three decades which seems (exchange-traded fund) with low ongoing charges
an extraordinary achievement for such an of 0.45% which has delivered solid annualised
unglamorous business. Formed in the early 1970s total returns of 6.4% over the past decade. The
by farmers in East Yorkshire to produce animal fund physically replicates the S&P Global Dividend
feed, today the company supplies a range of high- Aristocrats index, which tracks high dividend
quality, predominantly fresh food, including fresh yielding shares globally. The index is designed to
pork, poultry, convenience and gourmet products measure the performance of high-dividend-yielding
to most major supermarket and caterers. Using companies that have increased or maintained
data going back to the early 1990s, we estimate dividends for at least 10 successive years and
Cranswick has compounded earnings at more than also have positive cash flow from operations
11% per year with remarkable consistency which and a positive (ROE) return on equity. Diversified
would explain its ability to increase the dividend. across 99 cash generative businesses with an
It has achieved this by constantly innovating and average market cap of 20.5 billion, the ETF offers
adding value for its customers, both investing in an attractive 4.1% dividend yield and exposure
its own operations and via acquisitions, meaning to reliably income-yielding sectors including
it can pass through price rises to offset rising input financials, utilities and real estate. Top 10 positions
costs and protect its margins and cash-flow. include US-listed REIT (real estate investment
Analysts seem to continually underestimate trust) Highwoods Properties (HIW:NYSE)
the firm’s natural growth rate, as it regularly beats and Belgian multinational chemical company
consensus forecasts resulting in upgrades and a Solvay (SOLB:EBR), as well as cash generative
constantly rising share price. Its latest venture, US telecommunications conglomerate Verizon
supplying pet food to Pets at Home (PETS), is in (VZ:NYSE) and Getty Realty (GTY:NYSE), a REIT
its early days but we have little doubt that too will specialising in convenience and automotive retail
prove a winner in time. [IC] property.

Feature: Darktrace
Why Darktrace is getting exciting again

Forecasts for built-in-Britain cybersecurity business have been upgraded three times
this year
How Darktrace forecasts have changed

Revenue ($m) Net profit ($m) Annual recurring
revenue ($m)
$0 $200 $400 $600 $800
2024 Was $777
2024 Now $783
2025 Was $916
2025 Now $946
2026 Was $1073
2026 Now $1134
Was = 11 January 2024, Now = 11 April 2024

Chart: Shares magazine • Source: Berenberg
I
t must be maddening for analysts that footprint,’ said Darktrace chief executive
every time they’ve put forecasts for Poppy Gustafsson.
Darktrace (DARK) into the market, they’re Founded in Cambridge in 2013, Darktrace’s core
forced to tear them up and start again. It cybersecurity solution is its Enterprise Immune
happened for the third time already this year System, a IT system-agnostic platform that uses
earlier this month (11 April), in the wake of a behavioural analysis to detect the early signs of a
surprisingly strong third fiscal quarter update (to cyberattack on a network. EIS creates a model of
31 March) that the company predicts will mean users, devices, and network behaviours in normal
an extra $2.4 million of ARR, or annual recurring conditions, and, through real-time analytics and
revenue, this year, with sales and margin guidance AI pattern recognition, alerts IT teams on activities
also raised. outside of the norm.
Investors typically like stability and predictability Darktrace shares, in the relative doldrums for
yet you’ll find no one complaining. It means 18 months or so, jumped 6% on the update and
that while 2024 revenue projections have been surged again following Israel’s recent retaliatory
increased by around 1% this year, the subsequent strike against Iran.
hike to net income margins, from 12.6% to 18.2%, ‘We believe that the demand backdrop remains
means net profit is now forecast to be 46% positive, driven by the incidence of attacks and
higher ($124 million versus $85 million) this year regulation,’ Liberum analysts said on the outlook
than anticipated in January, based on Berenberg for Darktrace.
forecasts. Analysts continue to claim that Darktrace stock
Against a backcloth of intense geopolitical is being undervalued compared to US peers, partly
tension, governments and corporate clients are due to concern in recent years over shareholder
becoming increasingly wary of the threat of hacking and founding investor Mike Lynch, who faces
attacks. At the same time, AI (artificial intelligence) fraud charges in the US over his former company
tools are making it easier for hostile actors to carry Autonomy. Lynch has denied the charges.
out phishing attacks.
‘We are preparing to roll out enhanced market
and product positioning to better demonstrate By Steven Frazer News Editor
how our unique AI can help organisations to
address novel threats across their entire technology

Cut through
with conviction
Available in an ISA
FIDELITY INVESTMENT TRUSTS

Truly global and award-winning, the range is supported The value of investments can go down as well as up and you may
by expert portfolio managers, regional research teams and not get back the amount you invested. Overseas investments are
on-the-ground professionals with local connections. subject to currency fluctuations. The shares in the investment trusts
are listed on the London Stock Exchange and their price is affected
With over 450 investment professionals across the globe, we believe by supply and demand.
this gives us stronger insights across the markets in which we invest.
This is key in helping each trust identify local trends and invest with The investment trusts can gain additional exposure to the market,
the conviction needed to generate long-term outperformance. known as gearing, potentially increasing volatility. Investments in
emerging markets can more volatile that other more developed
Fidelity’s range of investment trusts: markets. Tax treatment depends on individual circumstances and all
• Fidelity Asian Values PLC tax rules may change in the future.
• Fidelity China Special Situations PLC
To find out more, scan the QR code, go to
• Fidelity Emerging Markets Limited fidelity.co.uk/its or speak to your adviser.
• Fidelity European Trust PLC
• Fidelity Japan Trust PLC
• Fidelity Special Values PLC
The latest annual reports, key information document (KID) and factsheets can be obtained from our website at www.fidelity.co.uk/its or by calling 0800 41 41 10. The full prospectus may also be obtained
from Fidelity. The Alternative Investment Fund Manager (AIFM) of Fidelity Investment Trusts is FIL Investment Services (UK) Limited. Issued by FIL Investment Services (UK) Limited, a firm authorised and
regulated by the Financial Conduct Authority. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. Investment professionals include both analysts and
associates. Source: Fidelity International, 30 September 2023. Data is unaudited. UKM1223/384820/SSO/1224
Feature: Small World
Small World: read about Gresham

Technologies, T Clarke, REDX
Pharma and more
Takeovers, de-listings, re-listings and a pivot from psychedelic drugs to crypto
I
t’s been a busy month in small-cap land with
good news, bad news and downright weird
news for investors to digest.
First the good news, as the persistent
undervaluation of UK companies – and small
caps in particular – draws increasing numbers of
corporate buyers.
Financial services software provider Gresham
Technologies (GHT) agreed a 163p per share cash
offer from funds managed or advised by STG
Partners, valuing the firm’s equity at just under
£150 million or a 27% premium to its market cap.
For investors in Gresham, including major
stakeholder Kestrel Partners, the deal represents
an opportunity to cash in at a premium, although
anyone who bought the shares above the bid price
will be forced to take a loss.
For STG, there is ‘an exciting opportunity
to combine Gresham with its portfolio
company, Alveo, which Bidco acquired in January
2023 with the aim of building a global and
differentiated enterprise data management
and governance platform for the capital markets ANOTHER TAKEOVER DEAL
tech ecosystem’. ‘Smart buildings’ and alternative energy group
T Clarke (CTO) was another firm attracting
FTSE AIM All-Share a takeover approach, this time from existing
shareholder and gas supplier Regent, at 160p per
share, valuing it at roughly £90 million.
800 The directors argue the 28% premium gives
minority investors a chance to ‘accelerate
the crystallisation of a certain value from their
750 investment’ at an attractive price given the shares
have ‘consistently traded at a discounted multiple’
to those of their listed peers.
700 As with Gresham, however, anyone who bought
the stock above 160p is crystallising a loss not a
profit and won’t exactly be jumping with joy.
Jul Oct Jan Apr For Regent, the deal is aimed at bringing it a
2023 2024 greater presence in more attractive markets
with better growth prospects than gas services
and metering.

Feature: Small World
(MNG) and serial investor Richard Griffiths, who

FTSE Small Cap between them control close to half of the firm’s
6,400 equity, as well as minority shareholders.
In a highly personal thread on X, formerly Twitter,
chief executive Ahmad Mortazavi described the UK
6,200
capital markets as not just illiquid but ‘completely
broken and closed’.
6,000 Mortazavi went on to say the firm tried to
raise funds earlier this year and ‘couldn’t even
secure a serious meeting let alone have a shot at
5,800 raising capital’.
The response from investors was ‘a blanket
refusal to invest in an AIM company and that a
Jul Oct Jan Apr
2023 2024
private company would be far more attractive’.
Chart: Shares magazine • Source: LSEG AN ODD CHANGE OF STRATEGY

In terms of sheer oddness, we couldn’t not include
While the M&A (mergers and acquisitions) Aquis-listed Clarify Pharma which announced it
market continues to bubble away as buyers take was no longer going to invest in psychedelic-led
advantage of low valuations, at the other end biotech and life sciences companies and would
of the market there is still a steady stream instead become ‘a provider of Filecoin stacking
of companies opting to de-list and take nodes’.
themselves private. To fund this new strategy, the firm sold two of
Clinical-stage biotech firm REDX its investments in Nasdaq-listed businesses
Pharma (REDX:AIM), which and has applied to Companies House
focuses on the discovery and to change its name to File Forge
development of novel, small- Technology, after which the ticker
molecule, targeted medicines will change from PSYC to FILE.
for the treatment of cancer Rather than back studies into
and other diseases, proposed LSD and MDMA as psychotherapy
de-listing its shares and re- treatments, which some investors
registering as a private company. might already consider to be
Despite some of the biggest fairly out-there, the firm’s new
AIM capital raises for a biotech mission is to build ‘an active and
company, REDX’s valuation is ‘not engaged community of investors that
reflective of our track record or future believe in the opportunity of the Filecoin
potential and is not conducive to raising the level ecosystem and want public market exposure to
of capital required for our growing clinical this growing market’.
portfolio,’ according to the directors. For the uninitiated, Shares included, Filecoin
Ironically, REDX was flagged by a national is ‘a decentralised storage network that turns cloud
newspaper in February as potentially eyeing a US storage into an algorithmic market. The market
listing which might have improved its valuation. runs on a blockchain with a native protocol
token (also called “Filecoin”), which miners
THROWING IN THE TOWEL earn by providing storage to clients,’ the firm
Another AIM-quoted biotech firm throwing in helpfully explains.
the towel is e-Therapeutics (ETX:AIM), which has
proposed canceling its London listing and is looking
at floating on Nasdaq instead. By Ian Conway Deputy Editor
The firm has proposed raising around £29 million
in new shares by tapping funds managed by M&G

THIS IS AN ADVERTISING PROMOTION
THE STORY OF THE ISA:

HOW TAX-FREE SAVING HAS EVOLVED IN THE UK
Melissa Gallagher, Head of Investment Trusts, BlackRock

As the Individual Savings Account (ISA) celebrated its 25th 11.8 million adult ISAs.7 It has clearly been a huge success,
anniversary on 6 April 2024, we take a look at its journey so attracting more than £700 billion of investment since 1999.7
far and the success it has brought in terms of democratising More than 22 million UK adults currently use the ISA wrapper
investment in the UK and, more importantly, generating to help build their long-term wealth,7 which is clear evidence
wealth for millions of savers. that the tax-efficient structure has gone some way to fulfil its
original objectives.
Capital at risk. The value of investments and the income
from them can fall as well as rise and are not guaranteed. Indeed, the ISA’s role in democratising investment in the UK
Investors may not get back the amount originally invested. has also helped catalyse the significant growth we have seen
from the investment trust industry over the last 25 years.
FROM PEP TO ISA According to government data, more than £28 billion of ISA
Originally introduced by Chancellor Nigel Lawson in 1986 money is invested in investment trusts.1 BlackRock manages
as the Personal Equity Plan (PEP)1, its purpose was to nine investment trusts focused on specific market niches,
encourage the “democratisation” of investment, by offering a all of which are suitable for consideration as a home for an
tax-efficient avenue into the stock market to a broader range individual’s ISA allowance.
of savers. The original amount that savers could shelter from
the tax authorities was set at £2,400 per annum,1 but the
annual allowance has been increased several times since
then.
The PEP was replaced in 1999 by the ISA,2 but its intention
remained the same. At the outset, savers could place £7,000
each year into an ISA. The amount each adult can currently
shelter from the tax authorities each year stands at £20,000
per person.3
In the meantime, the ISA has evolved, with innovations

such as the Junior ISA in 2011,4 which allows adults to
save up to £9,000 per annum for their children, and the
introduction of the Lifetime ISA in 2017,5 as a way for
people to save or invest for their future, providing an Meanwhile, the ISA structure continues to be reformed. In the
additional boost towards buying a first property or saving 2024 Spring Budget, Chancellor Jeremy Hunt introduced the
for retirement. concept of the UK ISA, which will represent an opportunity
for investors to shelter an additional £5,000 from the tax
HOW MUCH HAS BEEN INVESTED IN ISAS IN THE UK? authorities annually, as long as they invest it in the UK. We
The amount we’re paying into ISAs has grown significantly expect to receive the finer details of this policy in the coming
over the years. In the tax year of their introduction £28.4 months, but the intention is to encourage more investment
billion was saved across 9.3 million adult ISAs.6 By the 2021- into UK companies, which is similar to the aim of the original
22 tax year, this amount had grown to £66.9 billion across PEP back in 1986.
1
Hansard – 1986 Budget Statement – 18/03/1986
2
Hansard – 1998 Spring Budget Statement – 17/03/1998
3
UK Government – Individual Savings Accounts – 18/04/24
4
UK Government – Junior ISAs launch today – 01/11/2011
5
UK Government – What you need to know about the new Lifetime ISA – 17/02/17
6
HMRC – Individual Savings Account (ISA) Statistics – 30/06/22
7
UK Government data – annual savings statistics 2023 – 22/06/23
THIS IS AN ADVERTISING PROMOTION
HAVE ISAS MADE PEOPLE WEALTHY?

The ISA has clearly been successful in encouraging more
investors to access the UK stock market to help build their
long-term wealth. So much so, in fact, that it is estimated
that the UK now has more than 4,000 ISA millionaires.8
Within the investment trust industry, according to research
from the Association of Investment Companies (AIC), the
trade association which represents the investment trust
sector, a total of 32 investment trusts could have created
millionaires of their shareholders.9
Past performance is not a reliable indicator of current

or future results and should not be the sole factor of
consideration when selecting a product or strategy.
This is an excellent reminder of the power of compounding should be seen as just the beginning. The process of long-
in the stock market, as well as the ability of active investment term compounding – Albert Einstein’s “eighth wonder of the
managers. world”10 – may mean that many more ISA millionaires could
be created in the years ahead.
CONCLUSION
Beyond the thousands of ISA millionaires that have been From the start, the ISA has been a highly suitable home for
created, there has been a much broader benefit, with investment trusts, and that continues to be the case today.
literally millions of investors becoming empowered to build a Investment trusts are a highly valid route to market for
valuable, tax-efficient portfolio of ISA investments. investors that are hoping to be part of the next generation of
ISA millionaires.
The ISA has changed significantly over the years and, as the
recent UK ISA proposal demonstrates, it continues to evolve.
Throughout the change, however, it has remained a highly For further information on BlackRock’s investment trusts,
relevant structure for UK investors and its success to date please visit: www.blackrock.com/its
8
The Openwork Partnership – ISA millionaires hit record high – 01/08/23
9
AIC – ISA millionaires – 13/02/24
10
Investors Chronicle – Compound interest – the eighth wonder of the world – 22/09/22
RISK WARNINGS
Capital at risk. The value of investments and the income Any research in this document has been procured and may
from them can fall as well as rise and are not guaranteed. have been acted on by BlackRock for its own purpose.
Investors may not get back the amount originally invested. The results of such research are being made available
only incidentally. The views expressed do not constitute
Past performance is not a reliable indicator of current investment or any other advice and are subject to change.
or future results and should not be the sole factor of They do not necessarily reflect the views of any company
consideration when selecting a product or strategy. in the BlackRock Group or any part thereof and no
assurances are made as to their accuracy.
Changes in the rates of exchange between currencies may
cause the value of investments to diminish or increase. This document is for information purposes only and does
Fluctuation may be particularly marked in the case of a not constitute an offer or invitation to anyone to invest
higher volatility fund and the value of an investment may in any BlackRock funds and has not been prepared in
fall suddenly and substantially. Levels and basis of taxation connection with any such offer.
may change from time to time.
This document is Marketing material. © 2024 BlackRock, Inc. All Rights reserved.
Issued by BlackRock Investment Management (UK) BLACKROCK, BLACKROCK SOLUTIONS, and
Limited, authorised and regulated by the Financial Conduct iSHARES are trademarks of BlackRock, Inc.
Authority. Registered office: 12 Throgmorton Avenue, or its subsidiaries in the United States and
London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered elsewhere. All other trademarks are those of their
in England and Wales No. 02020394. For your protection respective owners.
telephone calls are usually recorded. Please refer to the
Financial Conduct Authority website for a list of authorised
activities conducted by BlackRock MKTGH0424E/S-3508439
Feature: Micro caps
Tap into micro caps for

a slice of UK innovation
Find out more about a ‘forgotten in recent years.
growth market’ Chris McVey, co-manager of the FP Octopus
UK Micro Cap Growth Fund (BYQ7HN4) told
A
key rationale for investing in the Shares: ‘UK smaller companies are the forgotten
smallest companies on the UK market growth market with the FTSE Small Cap Index, and
is that these businesses have the most FTSE AIM Index, offering similar earnings growth
capacity for growth. dynamics to Nasdaq, well ahead of the FTSE 100,
However, for several reasons investing in micro- yet trading at half the US peers’ earnings multiple.
cap businesses is not for everyone and has, with This valuation disconnect will not sustain. We
some notable exceptions, proved less than fruitful are excited about the prospect for significant
returns from current levels for UK growth equities
as interest rate conditions normalise and the
WHAT IS A MICRO CAP? economy pushes forward.’
The definition of what constitutes a micro
cap varies. Natalie Bell, fund manager at Kitwave
the Liontrust Economic Advantage team defines
a micro cap as being a company with a market 350
cap under £275 million.
The MSCI UK Micro Cap Index which focuses
300
on this sector includes 400 companies of which
the largest (as of 29 March 2024) has a market
valuation of £430 million. The mean average 250
size is around £96 million.
Ryan Lightfoot-Aminoff, analyst at Kepler
200
Trust Intelligence says: ‘There are several
investment trusts that focus on primarily on
micro caps which typically invest below this. 150
They invest from as low as circa £20 million
market cap up to a maximum of £150 million
at the time of initial investment, though often 100
holdings are allowed to grow if the investment 2022 2023 2024
thesis holds.’

Feature: Micro caps
Top performing UK small cap funds and investment trusts
One-year Three-year Five-year 10-year

performance performance performance performance
Fund/trust (%) (%) (%) (%)
Rockwood Strategic 18.6 50.0 120.6 140.8
Fidelity UK Smaller Companies

4.3 14.6 56.0 131.3
W Acc in GB
Odyssean Investment Trust −2.6 9.6 56.0 n/a
Strategic Equity Capital 13.6 15.1 54.7 120.0
Oryx International Growth 2.2 −20.5 54.4 180.5
VT Teviot UK Smaller
7.5 0.0 53.1 n/a
Companies Acc
WS Gresham House UK Smaller
7.8 −2.7 52.0 n/a
Companies C Acc
Liontrust UK Micro Cap I Acc 6.0 −3.2 51.7 n/a
JPMorgan UK Smaller
12.8 −19.2 51.7 126.1
Companies Investment Trust
ES R&M UK Listed Smaller
7.2 −10.3 38.4 109.3
Companies B Acc
Liontrust UK Smaller
5.1 −12.6 31.2 134.7
Companies I Inc
Aberforth Split Level Income
16.0 15.4 28.8 n/a
Trust
Aberforth UK Small Companies 11.0 4.3 27.3 64.1
Aberforth Smaller Companies

14.6 −2.5 25.2 63.7
Trust
Artemis UK Smaller Companies
6.5 4.4 23.3 96.9
I Acc
Table: Shares magazine • Source: FE Analytics, data to 18 April 2024. Total return in GBP
HOW TO INVEST IN MICROCAPS Equity Income – since launch in 2019, delivering

There are several ways to invest in microcaps returns of 43% to investors (cumulative
either buying a single stock, an performance to 29 February 2024)
investment trust or fund focused on versus 29.2% from its benchmark.
the micro-cap sector. Holdings include wholesaler Kitwave
The FP Octopus UK Micro Cap (KITW:AIM).
Growth Fund and FP Octopus UK Kitwave has had a steady stream
Multi Cap Income Fund (BG47Q55) of upgrades following its IPO in 2021
are two examples. which has helped propel its shares
The FP Octopus UK Multi up by more than 100%.
Cap Income Fund has beaten its From a dividend per share of 9.3p
benchmark – Investment Association UK for the year to October 2022, the group

Feature: Micro caps
is forecast to deliver a dividend micro caps have the potential to

this current financial year of 12.3p, deliver a multiple of the original
equating to a yield of almost 4%, and Overall, in share price.
income growth of over 36% in the the micro-cap ‘Second, when they succeed, their
period. investment market capitalisation rises so that they
FP Octopus UK Micro Cap Growth become of interest to a wider group
aims to achieve capital growth by universe it of professional investors. At this point,
investing in a portfolio of between 60 is possible to investors often get quite excited about
and 100 growing smaller companies. sometimes invest its prospects, and can sometimes drive
Since launch (31 August 2007) the up its market valuation.’
fund has returned a return of 158.9% in an exciting The largest holding in the Miton UK
and over five years 15.5%. growth stock
” Microcap Trust is currently Yu Group
(YU.: AIM). The trust started buying
ADVANTAGES OF MICRO the holding when its shares traded
CAP INVESTING was between 70.6p and 80.5p in August 2020. As
One of the main advantages of investing in micro of 28 March 2024, its share price was £18.
caps is that the investor is investing in small ‘Overall, in the micro-cap investment universe
businesses which are flexible and can adapt to it is possible to sometimes invest in an exciting
challenging market conditions, whereas larger growth stock, at a valuation which ticks the value
organisations are slower to change. box, in a business model that is in our view quality.’
Smaller companies also have quite flat
management structures and can problem solve and DISADVANTAGES OF MICROCAP INVESTING
come up with solutions quicker. The smaller the Although micro-cap stocks can offer investors an
company, the more focused they are on a product opportunity to get into some of the most exciting
or service. growth companies in the UK at an early stage, they
Gervais Williams, fund manager at Miton UK do come with certain risks which need navigating.
MicroCap Trust (MINI) says: ‘There are two main ‘These include lower liquidity, higher price
reasons for investing in micro caps. First, being volatility, hype-driven price cycles (also known as
immature, when they succeed, they sometimes go market bubbles, which can frequently occur in the
on succeeding for a series of years. They often start shares of single stocks) and lower standards of
off at sub-normal valuations, and as they expand, corporate governance,’ says Liontrust’s Natalie Bell.
they sometimes get lucky and grow even more Bell adds that micro caps are also not the
rapidly than expected. The net effect is that some traditional hunting ground for yield hungry
investors: ‘A company paying a dividend is generally
a sign of maturity and financial stability, and
therefore not naturally associated with micro
caps. These are typically younger firms focused
primarily on growth rather than distributing profits
via dividends.
‘More generally within the micro-cap universe
of 832 companies, only 27% pay a dividend, and
among these dividend-paying micro caps, only
12% offer a yield that surpasses the yield on a
two-year gilt (currently 4% according to US data
firm Bloomberg).’
By Sabuhi Gard Investment Writer

The largest holding in the Miton UK Microcap Trust is Yu Group

ADVERTISING PROMOTION
Fidelity European Trust PLC

Chosen by AJ Bell for its Select List
Fidelity European Trust PLC aims to be the cornerstone We continue to seek new opportunities to add to the
long-term investment of choice for those seeking European portfolio at the right price and remain confident in those
exposure across market cycles. names we currently hold. This approach has historically
Aiming to capture the diversity of Europe across a range served the portfolio well - including through the recent
of countries and sectors, this Trust looks beyond the noise of volatility of the last few months - and we see no reason to
market sentiment and concentrates on the real-life progress change course.
of European businesses. It researches and selects stocks
that can grow their dividends consistently, irrespective of
the economic environment. To find out more visit www.fidelity.co.uk/europe
Holding a steady course throughout market cycles

It is an uncertain time for the world and particularly for
Europe. It is however vitally important for investors not to be
blown off course. Good companies are still good companies
and finding them remains the ‘secret sauce’ of any effective
investment strategy.
We will remain focused on the companies in which we
have invested and, in particular, on their ability to continue
to grow their dividends. As always, we will ask ourselves if
that rate of dividend growth is already discounted in the
share price.
Performance over five years
Mar 2019 - Mar 2020 - Mar 2021 - Mar 2022 - Mar 2023 -
Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024
Net Asset Value −2.5% 30.1% 12.2% 12.6% 16.7%

Share Price 0.3% 32.5% 10.4% 14.2% 19.1%
FTSE World Europe ex-UK Total
−8.0% 34.9% 6.5% 8.7% 13.8%
Return Index
Past performance is not a reliable indicator of future returns.
Source: Morningstar as at 31.03.2024, bid-bid, net income reinvested. ©2024 Morningstar Inc. All rights reserved.
The FTSE World Europe ex-UK Total Return Index is a comparative index of the investment trust.
Important information
The value of investments and the income from them can go down as well as up, so you may get back less than you
invest. Investors should note that the views expressed may no longer be current and may have already been acted
upon. Changes in currency exchange rates may affect the value of an investment in overseas markets. This trust can
use financial derivative instruments for investment purposes, which may expose them to a higher degree of risk and
can cause investments to experience larger than average price fluctuations. The shares in the investment trust are
listed on the London Stock Exchange and their price is affected by supply and demand. The investment trust can gain
additional exposure to the market, known as gearing, potentially increasing volatility. This information is not a personal
recommendation for any particular investment. If you are unsure about the suitability of an investment you should
speak to an authorised financial adviser.
The latest annual reports, key information documents (KID) and factsheets can be obtained from our website
at www.fidelity.co.uk/its or by calling 0800 41 41 10. The full prospectus may also be obtained from Fidelity. The
Alternative Investment Fund Manager (AIFM) of Fidelity Investment Trusts is FIL Investment Services (UK)
Limited. Issued by FIL Investment Services (UK) Ltd, authorised and regulated by the Financial Conduct Authority.
Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited.
UKM0424/385993/SSO/0724
Personal Finance: Pensions
The perils of drawing

your pension early
There is a temptation to dip into your reason why some people spurn private pensions,
retirement pot as soon as it becomes seeing it as an unappealing constraint. But actually,
if you’re saving for retirement, 55 is a pretty young
accessible but it requires careful thought age to start drawing on your funds. Life expectancy
for a 55 year old man is 81, and for a woman is
E
very time anyone in the UK puts money 84, and these being averages, 50% of people can
into a pension, a deal is struck. The expect to live longer than that. So, if you access
government adds tax relief to the your pension in your mid 50s, you could easily be
contribution, and the quid pro quo is drawing on your retirement fund for as long as
you have to lock that money away for retirement. you’ve been saving into it. If you’re contributing
Hence why you can only access a pension after the somewhere in the region of 10% of your salary
age of 55, rising to 57 from 2028. while working, you would therefore be relying on
The idea is that if you’ve got your own funds Herculean levels of investment growth to maintain
to live on in retirement, you won’t fall back on your standard of living in retirement.
the benefits system and cost the exchequer Despite this a large number of people are
more money in the long term. This drawing their pension early. Around
unwritten private pension contract a third of those who made regular
is not without its controversy, withdrawals from their pension in
particularly around the issue of You would therefore 2022/23 were between the ages of
allowing tax relief for higher rates be relying on 55 and 64, according to the Financial
taxpayers, but that’s the system Conduct Authority.
the UK and many other countries Herculean levels of One of the benefits of saving into a
operate to incentivise retirement investment growth private pension is you take control of
saving. to maintain your your retirement, and having a robust
retirement fund as you approach
DRAWING EARLY standard of living your 60s means you can call the
The inability to draw on your money in retirement
until age 55, or 57, is undoubtedly a ” shots on when to take a step back
from work. But clearly accessing your

Personal Finance: Pensions
pension early opens up the possibility grows free of income and capital gains
you might run out of money later on in tax within the pension wrapper, so if
your retirement. But how can you get a Your pension you’re considering withdrawing cash from
handle on how big a risk is involved? fund can be your pension pot to fund investment
elsewhere, your decision should factor in
DIFFICULT TO PLAN passed on to whether you’re moving money from a tax-
They say nothing is certain apart from beneficiaries free to a taxable environment.
death and taxes, and that includes free from It’s also worth considering the
the timing of the former. Not knowing inheritance tax situation. Your pension
how long we will live for is a gigantic inheritance fund can be passed on to beneficiaries
encumbrance when it comes to
retirement planning. But you can take
tax
” free from inheritance tax, but if you take
money out and hold it in cash, or invest it
some lead from annuity rates. These are in a property, that then forms part of your
produced by insurance company based on stacks of estate and is potentially liable to IHT.
data about how long people live. If you hand over
£100,000 to an insurance company at age 55, they LIMITS ON WITHDRAWALS
will provide you with an income for life of £5,940 Depending on how you go about it, drawing your
each year. At 65, the same sum would snaffle you pension early might also reduce the annual amount
an annuity payment of £7,010 a year. This means you are permitted to save into a pension from
your pension needs to be about 20% bigger if you £60,000 to £10,000. You might think that once
want to retire at 55 compared to 65, or at least you start taking your pension you won’t want to
that’s what an insurance company actuary would put any more money into it. That makes sense but
say. These figures reflect average life expectancy, so might not necessarily end up being the case. If you
if you’re a teetotal marathon runner with a family continue working while drawing your pension, your
history of longevity, you might find yourself relying employer is required to offer to pay into a pension
on your pension for even longer. for you.
As well as having to sustain you for a longer You also might find yourself with a lump sum, for
period, if you use your pension to retire early you instance from an inheritance, which you might like
also lose out on growth on the money you withdraw to use to bolster your retirement fund. Accessing
and spend. Every £1 in your pension at age 55 would your pension early could therefore limit your ability
be worth £1.46 in real terms at age 65, assuming to reload your retirement fund.
6% fund growth and 2% inflation. This money also Clearly the ability to draw on retirement funds
earlier rather than later is one of the main reasons
some people save large sums into their pension.
This might not mean entirely disappearing from
the workforce, it could simply mean working
fewer days, or going freelance, and using your
pension fund to top up your earnings. This sort of
flexibility around your retirement options is one of
the rewards of prudently putting enough money
aside every month while you’re in the full swing of
working. But it’s still important to take a lengthy
pause for thought before dipping into your pension
pot for the first time, and if in doubt, consider
taking professional financial advice.
By Laith Khalaf
AJ Bell Head of Investment Analysis

ADVERTISING FEATURE
Smaller companies:
Starting to turn?
Abby Glennie and Amanda Yeaman,
Managers of abrdn UK Smaller Companies Growth Trust
• The long-awaited turnaround a reason to predict an imminent many companies had a tailwind during
in smaller companies is turnaround for UK smaller companies. the Covid recovery period, growth has
unlikely to happen just because This part of the market has been cheap been harder to find more recently. We
shares are lowly-valued for some time and, even as earnings believe in a world of lower growth,
• However, an improving for many small companies have the market is likely to reward those
economic and interest rate improved, it has only got cheaper. companies that can grow earnings
backdrop could spark renewed Today, the FTSE 250 has never been as organically and not be dependent on
interest in the sector cheap versus the FTSE 100. The sector external factors.
• M&A activity is also providing has continued to experience painful Our priority is to find companies
support for the smaller outflows. that are in charge of their destiny. In
companies sector Nevertheless, we see signs that the the retail sector, for example, we hold
market has found its floor. Smaller Games Workshop and Hollywood
Investors in UK smaller companies companies recovered strongly from Bowl, which have shown themselves
are justified in feeling impatient. The their lows in October 2022 and able to generate strong recurring
turnaround in the sector has been October 2023 and, for the investment revenues in spite of a tougher time for
slow to arrive, and poor sentiment trust sector, discounts have started consumers. Bytes Technology is an
has persisted far longer than justified – tentatively – to improve. This is IT solutions and services company,
by the on-the-ground experience of encouraging. aiming to help companies achieve
most smaller companies. However, maximum efficiency. At present,
a number of factors are coalescing IMPROVING EARNINGS GROWTH investors do not have to pay a
that may improve sentiment towards We see an increasing differentiation significant premium for higher quality
this unloved part of the market. within smaller companies, with an companies and this, in our view, is
improving earnings growth picture for an opportunity and could change
It has long been clear that low the stronger, higher quality smaller sentiment towards parts of the smaller
valuations are not, in themselves, companies versus their peers. While companies sector.
ADVERTISING FEATURE
CHALLENGING ECONOMIC such as the direction of interest for smaller company share prices in
BACKDROP rates and inflation, to one focused the longer-term, particularly for the
There have been two key sources of on the characteristics of individual highest quality companies.
poor sentiment towards UK smaller companies. This has even been More recently, the government
companies. The first has been the evident among the so-called has also done its bit for the sector. It
lacklustre UK economy. It may not be ‘Magnificent Seven’, where Tesla and announced plans for the new British
strictly true, but smaller companies Apple have diverged from their peers ISA, alongside a number of disclosure
tend to be perceived as more as investors have scrutinised their requirements for UK pension funds
domestically focused, and therefore performance more closely. designed to encourage them to invest
more vulnerable to the UK’s economic This is a more helpful environment in smaller companies . There is more
weakness. The second has been rising for smaller companies in general, and that could be done, but it is clear that
interest rates. the type of quality growth companies policymakers of all political stripes
While UK economic growth we favour in particular. It has long are focused on reviving the UK equity
is unexciting, the country only been a source of frustration for us market and smaller companies should
experienced a very short-lived and that many of the companies in the be a beneficiary.
shallow recession at the end of 2023 abrdn UK Smaller Companies Growth This is a stronger backdrop than has
and activity revived in January . The Trust have shown strong operational been seen for smaller companies for
sticky inflation problem that has performance that has not be some time. Nevertheless, there are still
weighed on growth is now ebbing, recognised by the market. From here, pockets of fragility. It is a more difficult
with the Consumer Prices Index slowly characteristics such as resilience, backdrop for companies with higher
falling. Consumer health has been pricing power, and balance sheet debt, weaker business models or poor
weak, but now appears to be showing strength – the type of characteristics pricing power. Companies are having
signs of improvement. we value – may be rewarded by the profit warnings and finding resilient
This, alongside slowing employment market. companies with good visibility of
data, should allow the Bank of earnings is important.
England to reduce interest rates. M&A ACTIVITY UK small cap is a diverse investment
This removes a major impediment Companies are increasingly taking class, with lots of great companies.
to a revival in sentiment for the UK’s their destiny into their own hands. With a tailwind from policymakers,
smaller companies. History suggests Some are buying back stock, M&A, plus a benign macroeconomic
that after the first rate cut, smaller reasoning that if the market will not and market environment, we are more
companies outperform their larger value their business properly, they confident on the outlook for smaller
peers over the next six and 12 months. are going to back it with their own companies than we have been for
capital. Bid activity is also picking up. some time.
SHIFTING MARKET ENVIRONMENT In particular, bids are coming in from
If the economic backdrop is becoming private equity groups with cash to Companies selected for illustrative
more benign for smaller companies, spare. At the margins, trade buyers purposes only to demonstrate the
the market environment may also and other listed vehicles are also investment management style
turn from a headwind to a tailwind. taking an interest. Some companies described herein and not as an
We see a subtle shift from a market have been taken out at too low a investment recommendation or
focused on macroeconomic factors, price, but it may help create support indication of future performance.
ADVERTISING FEATURE
Important information designed specifically for them. AIM is owned and

operated by the London Stock Exchange. Companies
Risk factors you should consider prior to investing: that trade on AIM may be harder to buy and sell than
• The value of investments, and the income from them, larger companies and their share prices may move
can go down as well as up and investors may get back up and down very sharply because they have lower
less than the amount invested. trading volumes and also because of the nature of the
• Past performance is not a guide to future results. companies themselves. In times of economic difficulty,
• Investment in the Company may not be appropriate for companies listed on AIM could fail altogether and you
investors who plan to withdraw their money within 5 could lose all your money.
years. • The Company invests in smaller companies which
• There is no guarantee that the market price of the are likely to carry a higher degree of risk than larger
Company’s shares will fully reflect their underlying Net companies.
Asset Value. • Specialist funds which invest in small markets or
• As with all stock exchange investments the value of sectors of industry are likely to be more volatile than
the Trust shares purchased will immediately fall by the more diversified trusts.
difference between the buying and selling prices, the • Derivatives may be used, subject to restrictions set out
bid-offer spread. If trading volumes fall, the bid-offer for the Company, in order to manage risk and generate
spread can widen. income. The market in derivatives can be volatile and
• The Company may borrow to finance further there is a higher than average risk of loss.
investment (gearing). The use of gearing is likely to lead • Certain trusts may seek to invest in higher yielding
to volatility in the Net Asset Value (NAV) meaning that securities such as bonds, which are subject to credit
any movement in the value of the company’s assets risk, market price risk and interest rate risk. Unlike
will result in a magnified movement in the NAV. income from a single bond, the level of income from an
• The Company may accumulate investment positions investment trust is not fixed and may fluctuate.
which represent more than normal trading volumes
which may make it difficult to realise investments Other important information:
and may lead to volatility in the market price of the Issued by abrdn Fund Managers Limited, registered
Company’s shares. in England and Wales (740118) at 280 Bishopsgate,
• Yields are estimated figures and may fluctuate, there London EC2M 4AG. abrdn Investments Limited,
are no guarantees that future dividends will match or registered in Scotland (No. 108419), 10 Queen’s Terrace,
exceed historic dividends and certain investors may be Aberdeen AB10 1XL. Both companies are authorised
subject to further tax on dividends. and regulated by the Financial Conduct Authority
• The Company may charge expenses to capital which in the UK.
may erode the capital value of the investment.
• The Alternative Investment Market (AIM) is a flexible, Find out more at:
international market that offers small and growing www.abrdnuksmallercompaniesgrowthtrust.co.uk,
companies the benefits of trading on a world-class or by registering for updates.
public market within a regulatory environment You can also follow us on social media: X and LinkedIn.
Investment trusts: Ruffer Investment Company
Meet the newest addition to Alliance

Trust’s roster of managers
Popular investment vehicle replaces
Jupiter after departure of highly-rated
Ben Whitmore
P
opular investment vehicle Alliance Trust
(ATST) has announced a modest but
meaningful shake-up of its portfolio.
The FTSE 250 constituent invests locations in the US, India and UK. The table shows
in global equities across a range of industries the allocations in Alliance Trust following the switch
and sectors through a ‘manager of managers’ out of Jupiter.
approach. Following an overhaul in 2017, the trust
gives investors relatively low-cost exposure (with
an ongoing charge of 0.62%) to 10 leading fund Manager Style Allocation
managers selected by Willis Towers Watson, the High quality,
manager of the trust. sustainable
GQG Partners 20%
These managers run concentrated portfolios of businesses (inc
their very best ideas and by pursuing this approach, EM)
Alliance Trust hopes to achieve a high level of Quality
diversification across different investment styles Veritas AM companies at 16%
and geographies. On a 10-year view it has achieved the right price
a creditable annualised return of 12.9%. The shares High quality
trade at a modest 3.4% discount to NAV (net asset SGA global growth 13%
value). businesses
Following news of Ben Whitmore’s imminent Market leaders
departure from Jupiter Fund Management Black Creek IM with growing 11%
(JUP) the trust has taken the decision to make a market share
switch to ARGA Investment Management. Jupiter
Metropolis
accounted for 9% of the portfolio at the last count, Capital
Value 10%
while the trust has said ARGA will have an 8%
weighting. ARGA IM Value 8%
Numis analyst Ash Nandi comments: ‘Ben is a Vulcan Value Capital
6%
highly-rated manager and therefore the switch away Partners protection
from Jupiter to ARGA shouldn’t be a surprise. ARGA Lyrical AM Quality value 6%
also takes a value-orientated approach, meaning the
manager change does not result in any meaningful Dalton
Value 5%
Investments
change in style allocation for the fund.’
As Nandi says, ARGA IM is a global value-focused Sands Capital Quality growth 4%
manager. Its overriding strategy is to capitalise on
situations where the market has overreacted to Table: Shares magazine • Source: Alliance Trust, Numis
negative news flow and has mistaken temporary
share-price stress for an irretrievable situation.
Founded in 2010 by chief investment officer A. By Tom Sieber Editor
Rama Krishna, the company has some £11.8 billion
of assets under management and operates from

ADVERTISING FEATURE
International Biotechnology Trust plc (IBT):

The changing face of biotechnology
In the UK, investor perceptions of the biotech sector

seem out-dated. It would perhaps be wrong to
say the whole world has moved on, but without
doubt, part of it, namely the US biotech sector, has
changed beyond recognition over the last 20 years.
If you ask twenty investors what they think of a

particular sector, you are likely to be greeted with
twenty different responses. The role of the stock
market is to find a consensus from that range of views,
and its ‘invisible hand’ then sets prices accordingly.
We live in an ever-changing world, however, and
sometimes industry dynamics can change faster than
investor perceptions, creating opportunities for active
investors to capture.
In the case of biotechnology, there’s a fair chance
that such an investor survey would be smattered
with phrases such as “high octane”, “early stage”,
“funding dependent”, “binary outcomes” and “distant phenomenon involved a collection of very small
cashflows”. Some investors would be attracted to the companies coming to the public market to progress
high risk, potentially high reward, opportunity that is their cutting-edge drug discovery programmes. As
reflected in such statements. Others – arguably, the the science was relatively new, the failure rate of these
majority, given current sector valuations – would likely businesses was initially high and there were many
run a mile. high profile blow ups, mainly in the US but also in the
It is fair to say that the history of the biotech industry UK. Undoubtedly, these early disappointments will
has influenced such views, particularly in the UK. But a have scarred many market participants, and to a large
key question for investors to consider is, are the current extent, modern investor perceptions are still influenced
perceptions that are reflected in biotechnology sector by those negative outcomes.
valuations still relevant? Or has the industry matured It is fair to say that, to this day, the failure rate remains
positively in recent years, without investors really high in early stage biotech, but as the industry has
noticing? matured, success stories have become more frequent.
Advances in technology, a deeper understanding of
THE BIRTH OF BIOTECH biology and improved research methodologies have all
From ancient Egyptian fermentation practices to the contributed to a steady decline in the failure rate over
genetic experiments of Gregor Mendel in the 19th time, as has the evolution of regulatory frameworks,
century, the roots of biotechnology can be traced which provide clearer pathways for drug development.
back through many centuries. The 20th century saw Biotech companies have taken over from “in house”
crucial breakthroughs such as the unlocking of the R&D at big pharma companies. IQVIA reported that
secrets of DNA, and in the 1980s, biotech emerged on less than 25% of the global drug pipeline was being
the stock market with the arrival of businesses such as developed in pharmaceutical companies in 2022, with
Genentech and Amgen in the United States. small biotech companies responsible for over two
The origin of the sector as a stock market thirds of new drugs1 Pharmaceutical companies now
1
Global Trends in R&D 2023 - IQVIA
plug their distribution pipelines with acquisitions of a history of innovation, the UK is exceptionally good
and licencing deals with biotech companies. at early-stage biotech and has a deserved reputation
Many of the original pioneers, including Amgen for cutting edge drug discovery in the global biotech
and Genentech (now part of Roche), have gone on to ecosystem, but has not been able to convert early-
become very successful scaled businesses, with highly stage promise into scaled, commercial reality
profitable drug franchises and their own distribution independently.
networks. And the share price appreciation they have UK investor perceptions are, inevitably, shaped
enjoyed as their development pipelines have delivered by what’s on our doorsteps and what we hear
has been extraordinary. about and read about in the domestic media. This
From a UK investor’s perspective, this evolution of the potentially means that UK investors are less aware of
biotech sector may come as something of a surprise. the compelling biotech investment opportunity that
That’s because the vast majority of the success stories has unfolded – and continues to unfold – in the US.
have been concentrated in the US. Indeed, the Nasdaq In turn, this perhaps makes them more risk averse
Biotechnology Index (NBI) as a whole turned cash than they need to be when it comes to investing in
positive back in 2007, which demonstrates the very biotech.
significant change that has occurred in US biotech A potential solution for investors perhaps revolves
over the years. around a strategy that harnesses the best of both
worlds. As managers of International Biotechnology
REGIONAL DIFFERENCES Trust plc (IBT), we would point to the important clue in
Part of the perception problem stems from the fact its name. While IBT is a UK listed investment trust, the
that, outside of the US, success stories have not been vast majority of IBT’s assets are invested in the US, the
so numerous. The UK still does not have a poster child clear epicentre of the biotech industry and the location
of a scaled commercial biotech business. Europe of the vast majority of its historic success.
has seen some successes, such as Novo Nordisk and Where we are exposed to other parts of the world,
Genmab from Denmark, but the fragmented nature it tends to be to attain exposure to particular parts of
of the European market has made it hard for it to fully the biotech universe. For example, our venture fund
develop the ecosystem that is required to provide investments account for less than 10% of IBT’s net asset
young biotech companies with everything they need value and are designed to provide broad exposure
to mature into scaled, commercial enterprises. to earlier-stage unquoted biotech innovation. In this
By contrast, the US has developed this infrastructure part of the portfolio, the geographic balance is very
and know-how. It still takes time, but with thriving different, with nearly 50% of assets exposed to the
innovation hubs in places like Boston and the San UK, due to the UK’s world-class capabilities in early-
Franscisco Bay area, the US has built the necessary stage biotech.
financial, technical, scientific and human resource
ecosystems to be able to support young biotech
businesses through to maturity positively. In biological
terms, the US biotech industry has developed the
muscles for success.
Indeed, on many occasions, UK and European
biotechs have felt compelled to migrate to the US
to improve their chances of success, either through
merger & acquisition (M&A) activity or through listing.
For example, Cambridge-based GW Pharmaceuticals
originally listed on London’s Alternative Investment
Market (AIM) in 2001, and in 2013 it dual-listed on
Nasdaq in the US. This gave it access to significantly
more equity capital and the increased demand
resulted in a valuation uplift of c. 30%. In 2016 it
announced it would cancel its UK listing and, in 2021, it
was acquired by Jazz Pharmaceuticals.
PLAYING TO EACH REGION’S STRENGTHS

So, while US biotech has matured into an established
market, the UK biotech sector remains early-stage
and higher risk. With a strong academic pedigree and
IBT’S NAV% BY HEADQUARTER LOCATION
Source: Schroders as at 31 January 2024
DIVERSITY OF OPPORTUNITY CONCLUSION

To further illustrate the scale and diversity of US In the UK, investor perceptions of the biotech sector
biotechnology, below we have sliced up the IBT seem out-dated. It would perhaps be wrong to say the
portfolio into different market cap segments. Investors whole world has moved on, but without doubt, part of
may perceive a biotech investment proposition as it, namely the US biotech sector, has changed beyond
being dominated by small, lab-based companies, but recognition over the last 20 years.
clearly that is not the case. Indeed, when we talk about As professional investors, dedicated to the biotech
‘small cap’ biotech, we are talking about businesses sector, the opportunity set that we see today is more
with a market cap of anything up to $2bn. diverse than ever. We can still access smaller, early-
We believe it is worth having some exposure to stage drug discovery businesses, but we can also invest
exciting early-stage drug discovery through the in very substantial, cash generative businesses. And
venture portfolio, but this should be balanced by there is a diverse spectrum of opportunity in between.
exposure to opportunities at a more advanced stage of We divide the market into three categories of
development too. This allocation is not set in stone – as relative maturity – early stage (companies with drugs
active investors, it can and does change over time as in development), revenue growth (companies whose
the opportunity set evolves. drugs are approved but not yet turning a profit) and
The IBT portfolio currently has a sizeable exposure profitable, as illustrated below. Our intimate knowledge
to small cap biotech, but almost two-thirds of it is of the industry allows us to change the composition
invested in companies with a market cap of more than of the portfolio to suit where we are in the biotech
$2bn, most of which have an approved product on the investment cycle. If we become concerned about the
market. Nearly a fifth is invested in what we categorise outlook for the sector, we can shift emphasis towards
as “mega caps”, with a market cap in excess of $30bn. the large, less risky, profitable biotech companies.
This segment includes the likes of Amgen and Alternatively, when the outlook appears more benign,
Gilead, which started small but are clearly now very we can increase exposure towards higher-beta
substantial and successful businesses – shareholders opportunities earlier in their drug development journey
have enjoyed that journey of long-term value creation. in the early stage and revenue growth categories.
IBT portfolio as at January 2024 IBT portfolio as at January

31 January
2024
2024
Importantly, we are currently tilting the portfolio
towards the higher-beta, smaller biotech companies,
because we are excited about what lies ahead in 2024
and beyond. With long-term secular growth trends
currently being supported by cyclical investment
tailwinds, we are confident about the outlook for the
biotech sector, particularly in the US. As it has matured,
the fundamentals of the US biotech investment
proposition have continued to strengthen, and we
believe that IBT is well-positioned to capture its
incredible long-term potential.
Click here to find out more about International

Biotechnology Trust (IBT)
MARKETING MATERIAL Exchange rate changes may cause the value of any
This communication is marketing material. The overseas investments to rise or fall.
views and opinions contained herein are those of the
named author(s) on this page, and may not necessarily Any sectors, securities, regions or countries shown
represent views expressed or reflected in other Schroders above are for illustrative purposes only and are not to be
communications, strategies or funds. considered a recommendation to buy or sell.
This document is intended to be for information purposes The forecasts included should not be relied upon, are not
only and it is not intended as promotional material in guaranteed and are provided only as at the date of issue.
any respect. The material is not intended as an offer
or solicitation for the purchase or sale of any financial Our forecasts are based on our own assumptions which
instrument. may change. Forecasts and assumptions may be affected
by external economic or other factors.
The material is not intended to provide, and should not be
relied on for, accounting, legal or tax advice, or investment For help in understanding any terms used, please visit
recommendations. Information herein is believed to address https://www.schroders.com/en/insights/invest-
be reliable but Schroder Investment Management Ltd iq/investiq/education-hub/glossary/
(Schroders) does not warrant its completeness or accuracy.
We recommend you seek financial advice from an
The data has been sourced by Schroders and should Independent Adviser before making an investment
be independently verified before further publication decision. If you don’t already have an Adviser, you can find
or use. No responsibility can be accepted for error of one at www.unbiased.co.uk or www.vouchedfor.co.uk
fact or opinion. This does not exclude or restrict any
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under the Financial Services and Markets Act 2000 (as prospectus, the latest Key Information Document
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information in the document when taking individual
investment and/or strategic decisions.
Issued by Schroder Unit Trusts Limited, 1 London Wall
Past Performance is not a guide to future performance. Place, London EC2Y 5AU. Registered Number 4191730
The value of investments and the income from them may England.
go down as well as up and investors may not get back the Authorised and regulated by the Financial Conduct
amounts originally invested. Authority.
Emerging markets outlook
Sponsored by Templeton Emerging Markets Investment Trust
Chinese manufacturing PMI data

needs to be closely watched
Understand how these indices are constructed and why they are so influential
Caixin/S&P Global China General

Manufacturing PMI
50
48
46
2023 2024
T
he world’s second largest economy five different underlying indices covering New
and most dominant emerging market Orders (30%), Output (25%), Employment (20%),
remains China and to get a window into Suppliers’ Delivery Times (15%) and Stocks of
the prospects for growth investors often Purchases (10%).
look to PMI (purchasing managers’ index) data.
One influential reading is the Caixin/S&P Global Weightings for Caixin/S&P Global
China General Manufacturing PMI. Manufacturing China General Manufacturing PMI
accounts for a big chunk of Chinese GDP and PMI
surveys are used globally as a leading indicator
Stocks of
of economic health. Businesses have to react purchases
rapidly to changing market conditions and, given 10%
New
they control the purse strings, their purchasing Suppliers'
delivery
orders
managers hold what is likely to be the most up to times
30%
date and relevant insight into the company’s view 15%
of the economy.
The Caixin/S&P index is compiled based
on responses to questionnaires sent to a Employment
panel of around 650 private and state-owned 20%
manufacturers. The panel is stratified by detailed Output
25%
sector and company workforce size, based on
contributions to GDP.
Survey responses are collected in the second half
of each month and indicate the direction of change Chart: Shares magazine • Source: Caixin/S&P Global
compared to the previous month.

This outlook is part of a series being sponsored by
Any figure above 50 will imply growth whereas
Templeton Emerging Markets Investment Trust. For
any number below this threshold indicates more information on the trust, visit www.temit.co.uk
contraction. The index is a weighted average of

Emerging markets outlook
Sponsored by Templeton Emerging Markets Investment Trust
Emerging markets: China rebound,

Indian elections and valuations
Three things the Franklin Templeton emerging markets team are thinking about right now
1.
China–Signs of a rebound: Purchasing widened over the past 12 months on a narrowing
manager indexes in China rebounded in of the GDP growth differential and higher DM
March, with the Caixin/S&P Global index earnings growth. Looking ahead, the GDP growth
reaching its highest level in over a year. Drivers of differential may widen in favour of EMs. In
the rebound included rising raw material purchases combination with higher earnings growth this year
and inventories. Chinese industrial companies and next, we think these factors could act as a
may be restocking ahead of the government’s catalyst for investors to reassess their allocations
planned 20% increase in special bond issuance this to emerging markets, potentially leading to
year to $680 billion. The increase in special bond increased fund inflows and improved equity market
issuance is linked to the official gross domestic performance.
product (GDP) growth target of ‘around 5%’
in 2024. TEMPLETON EMERGING MARKETS
INVESTMENT TRUST (TEMIT)
2.
India confirmation of election date:
India will go to the polls on 19 April, with
voting in the general election continuing
Portfolio Managers
over six weeks. The incumbent Bharatiya Janata
Party (BJP), led by Prime Minister Narendra Modi,
is expected to win comfortably. Investors are
focusing on whether the party and its partners
can win 358 seats—or a two-thirds majority in the
lower house—which will enable them to make
constitutional changes.
Chetan Sehgal Andrew Ness
3.
Emerging market valuations: The price- Singapore Edinburgh
to-earnings discount for emerging markets
TEMIT is the UK’s largest and oldest emerging
(EMs) relative to developed market (DM)
peers was 35% in March. Historically, EMs trade at markets investment trust seeking long-term
capital appreciation.
a valuation discount to DMs; however, the gap has

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circa5000.com
Disclaimer : Issued by CIRCA5000 UK Ltd. Registered in England and Wales, company no. 13214839. Registered office: 86-90 Paul
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the ICAV is Carne Global Fund Managers (Ireland) Limited, who is authorised and regulated by the Central Bank of Ireland, reference
number C 46640. The ICAV is a recognised scheme under section 272 of the Financial Services Market Act 2000 and so the prospectus
may be distributed to investors in the UK . Thematic Risk: The Fund may be subject to the risks associated with, but not limited to,
investing in companies with a material exposure to the climate transition. These risks include the obsolescence of intellectual property
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Derivative Risk: The Fund may invest in Financial Derivative Instruments (FDIs) to hedge against risk, to increase return and/or for
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Risk: The risk that the market will go down in value, with the possibility that such changes will be sharp and unpredictable. Operational
Risk: The Fund and its assets may experience material losses as a result of technology/system failures, human error, policy breaches,
and/or incorrect valuation of units. Capital at risk . The value of investments and the income from them can fall as well as rise and are not
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results and should not be the sole factor of consideration when selecting a product or strategy. Changes in the rates of exchange
between currencies may cause the value of investments to diminish or increase. All features described in this fact sheet are those
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therefore not a recommendation to buy or sell investments. If in doubt about the suitability of this product, you should seek professional
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applications from outside of such jurisdictions.

Daniel Coatsworth: Activists vs Raiders
Wage growth
pressures
remain high:
Why it matters
to investors
Companies will either have to stomach
lower profit margins or once again pass
on extra costs to the customer
T
he persistently high interest rate – swallow the extra costs and suffer a hit to profit
environment means companies are margins or pass on the extra costs to the customer.
under pressure to cut costs and jobs are The latter is a risky strategy in a period where
an obvious target. While they can cut everyone expects inflation to fall and the public has
their workforce through redundancies or slash the already had enough of big price hikes over the past
wage bill through shorter or fewer shifts, others few years. However, the recipient of the pay rise
might already be operating with a skeleton crew will have more money in their pocket, so companies
and cannot pare back any further. need to decide if hiking prices is a risk worth taking.
It is against this scenario that higher wages are There are other factors to consider. The
adding to companies’ problems and threatening additional two percentage point cut to national
to dilute their profit margins – something the insurance announced in March and actioned from
market does not like, thus acting as an anchor 6 April is worth £450 annually to the average
on share prices. worker, according to the Treasury. Another boost
The latest UK wage growth figures came in hotter to their finances.
than expected, up 5.6% in the three months to In the supermarket’s latest results, Tesco (TSCO)
February. Furthermore, UK companies have this chief executive Ken Murphy said price inflation in
month found themselves nursing another headache groceries had ‘lessened substantially’, suggesting
in the form of changes to the National Living Wage. that the rapid rise in the cost of a weekly shop is
The minimum amount paid to workers has gone up already slowing. Energy bills are also declining –
by approximately one pound per hour to £11.44 from 1 April, the typically energy bill fell to £1,690,
and the minimum qualifying age has moved from the lowest price in two years.
23 to 21. More money for more people.
GENEROUS PAY RISES
TWO OPTIONS FOR COMPANIES Supermarkets will be happy as many firms have
The hospitality and retail sectors are particularly pushed through bigger pay rises than required
exposed to the National Living Wage changes and until the National Living Wage so they could do
there are two ways that companies can respond with customers filling their baskets to help cover

Daniel Coatsworth: Activists vs Raiders
the extra wage bill. For example, Tesco is lifting its

hourly pay by one pound to £12.02 per hour from
28 April, representing a 9.1% pay rise.
These factors combined suggest that consumers
should be in a better situation to get their finances
under control. That clarity could feed into greater
confidence which in turn could lead to higher
spending – thus companies facing higher wage bills
might not be facing disaster.
However, demand for certain goods and services
is still fragile and companies cannot sit back and
assume consumers are going to splash the extra
cash in their pocket. Therefore, aggressive price
hikes to cover extra wage bills could easily backfire. PageGroup gross profit analysis
‘In 2024, businesses will hope for a quicker-than-
expected fall in inflation and interest rates, but Q1 2023 vs
many moving parts need to slot into place before % of group Q2 2024
we can be sure of an economic “soft landing”,’ says
Jo Robinson, a partner at consultant EY-Parthenon. EMEA 56% −15.4%
‘We expect to see increasing disparity between
businesses that are positioned to capitalise on still- Americas 17% −12.6%
limited growth and those that are hampered by the

impact of recent earnings pressures or their access Asia Pacific 15% −22.0%
to and the cost of capital. It is shaping up to be an

UK 12% −19.2%
easier year for many, but not all UK companies.’
TOTAL 100% −16.4%
WHAT ABOUT OVERSEAS COMPANIES?
At face value, it seems as if many UK companies
might weather the storm with the extra wage bill. Table: Shares magazine • Source: Page Group
How does that compare with other geographic

territories? It looks as if the UK might have a small first out’ mantra has stood the test of time.
advantage but the situation is far from perfect. A year ago, people predicted interest cuts would
Big companies with operations around the world have happened by now – they have not, apart
continue to lay off staff, including many in the from a small group of countries. Businesses and
tech and banking sectors. An uncertain economic consumers are both under pressure and that has a
outlook means management teams need to take a profound impact on spending decisions.
prudent view of near-term earnings prospects. For Companies that continue to pass on extra costs
example, Tesla (TSLA:NASDAQ) is cutting 10% of its to customers are simply adding to these pressures
workforce as it has become harder to sell electric and this can fuel inflation, which in turn gives
vehicles despite price cuts. central banks even less of a reason to cut rates.
International recruitment consultant PageGroup That poses a risk to equity and bond markets which
(PAGE) on 15 April reported a drop in quarterly have been desperately waiting for the central bank
profit for every single operating region, including pivot in monetary policy. With the economic winds
the UK. Companies lack confidence in the near- continuing to blow in different directions, investors
term outlook and we are seeing a slowdown in will need to stay focused and patient.
hiring activity. Even people in receipt of a job offer
are taking ages to accept them, says PageGroup, a By Daniel Coatsworth
sign of nervousness to move job. No-one wants to AJ Bell Editor in Chief and Investment Analyst
accept a new role and then find out why the ‘last in,

Fidelity Special Values PLC

An AJ Bell Select List
Investment Trust
The recent strong relative performance of the UK equity conviction in a stock. Our approach translates into a clear
market has gone largely unnoticed by investors, reinforcing bias towards small and mid-cap value stocks, compared to
its unloved status. Alex Wright, portfolio manager of Fidelity most of our competitors who are often less differentiated.
Special Values PLC, believes the value-oriented areas of the It’s a consistent and disciplined approach that has worked
UK market represent a strong investment opportunity. well; the trust has significantly outperformed the FTSE All
Share Index over the long term both since Alex took over in
Turning insight into opportunity September 2012 and from launch over 29 years ago.
Despite the UK being a value market, many of those who
invest in the market don’t invest with a value bias. However, To find out more visit www.fidelity.co.uk/specialvalues
Alex looks to construct portfolios focused on unloved UK
companies entering a period of positive change. The market
is often slow to recognise change in out-of-favour stocks
which creates opportunities to add value by identifying
companies whose improving growth prospects are not yet
recognised by other investors.
Our broad analyst coverage means that we are able
to find ideas across the market cap spectrum, giving us
many shots on goal. Our network of over 400 investment
professionals around the world place significant emphasis
on questioning management teams to fully understand
their corporate strategy. They also take time to speak
to clients and suppliers of companies in order to build
Past performance
Past performance
Mar 2019 - Mar 2020 - Mar 2021 - Mar 2022 - Mar 2023 -
Mar2019
Mar 2020- Mar2020
Mar 2021- Mar2021
Mar 2022- Mar2022
Mar 2023- Mar2023
Mar 2024-
Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024
Net Asset Value −29.2% 57.3% 9.8% 5.0% 11.2%
Net Asset
Share PriceValue −29.2%
−31.5% 57.3%
62.5% 9.8%
10.5% 5.0%
−3.7% 11.2%
9.5%
Share Price
FTSE All Share Index −31.5%
−18.5% 62.5%
26.7% 10.5%
13.0% −3.7%
2.9% 9.5%
8.4%
FTSE All Share Index
Past performance is not a reliable−18.5%
indicator of future 26.7%
returns 13.0% 2.9% 8.4%
Past performance is not a reliable indicator of future returns
Morningstar as at 31.03.2024, bid-bid, net income reinvested. ©2024 Morningstar Inc.
Source: Morningstar
Pastrights
All performance isasnot
reserved. at 31.12.2023,
Thea reliable
FTSE All bid-bid,
Sharenet
indicator of income
future
Index areinvested.
isreturns
comparative©2024index
Morningstar
of theInc. All rights reserved.
investment trust The FTSE All Share Index is
a comparative index of the investment trust
Source: Morningstar as at 31.12.2023, bid-bid, net income reinvested. ©2024 Morningstar Inc. All rights reserved. The FTSE All Share Index is
a comparative index of the investment trust
Important information
The value of investments can go down as well as up and you may not
get back the amount you invested. Overseas investments are subject to
currency fluctuations. The shares in the investment trust are listed on the London Stock Exchange and their price is
affected by supply and demand. The Trust can use financial derivative instruments for investment purposes, which may
expose it to a higher degree of risk and can cause investments to experience larger than average price fluctuations.
The investment trust can gain additional exposure to the market, known as gearing, potentially increasing volatility. The
trust invests more heavily than others in smaller companies, which can carry a higher risk because their share prices may
be more volatile than those of larger companies and the securities are often less liquid. This information is not a personal
recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak
to an authorised financial adviser.
Investment professionals include both analysts and associates. Source: Fidelity International, 31 January 2024. Data is unaudited.
The latest annual reports, key information documents (KID) and factsheets can be obtained from our website at www.fidelity.co.uk/its
or by calling 0800 41 41 10. The full prospectus may also be obtained from Fidelity. The Alternative Investment Fund Manager (AIFM) of
Fidelity Investment Trusts is FIL Investment Services (UK) Limited. Issued by FIL Investment Services (UK) Ltd, authorised and regulated
by the Financial Conduct Authority. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL
Limited. UKM0424/385993/SSO/0724
Editor’s View: Tom Sieber
What Bitcoin halving means and

why the price barely moved
Trading in cryptocurrency proves once Bitcoin
again it is better to travel than arrive
F
($)
ollowers of Bitcoin will have been closely
watching the latest ‘halving event’ in 60,000
the cryptocurrency which took place on
50,000
19 April.
For the fourth time, the number of new Bitcoin 40,000
entering the market has been slashed by cutting the 30,000
rewards earned by Bitcoin miners by 50%.
Mining Bitcoin involves using powerful computers 20,000
to solve extremely complicated mathematical 10,000

problems in order to verify transactions in the 0
currency. In return for this work the miner receives
2020 2021 2022 2023 2024
a predetermined amount of Bitcoin.
Planned to take place at rough four-year intervals, Chart: Shares magazine • Source: LSEG
the eventual aim of halving events is to cap the
supply of Bitcoin at 21 million units by 2140. The
halving mechanism was written into Bitcoin’s code What happened to Bitcoin after
when it was first created. previous halving events
Previous halvings (in 2012, 2016 and 2020) were
followed by strong gains for Bitcoin, as the table Halving Price at Cycle
shows. date halving max price
However, this time round the situation may
end up reinforcing an idiom which has a rather Cycle 1
28 Nov
$12.50
$1,163
longer history than Bitcoin itself: when it comes to 12 (Nov 2013)
investing, it is better to travel than arrive. $19,333
Cycle 2 9 Jul 16 $638.51
Financial markets, made up of countless (Dec 2017)
individual investors, are forward-looking, 11 May $68,982.20
discounting mechanisms. They seek to anticipate an Cycle 3 $8,475.00
20 (Nov 2021)
event, price in a perception of what it means and
then move on. It is only when a fresh piece of news Table: Shares magazine • Source: Coin Metrics
emerges which challenges the market view that the
price of an asset is likely to see a significant change. to expand but JD’s previous success in the States
Put more simply, markets specialise in buying on gives it the credibility others lack. One of the key
speculation and selling on fact. decisions it made when acquiring Finish Line
for $558 million in 2018 was to retain
T
he latest acquisition by JD the existing management team and
Sports (JD.) received a leverage their considerable expertise.
positive reception from This strategy proved to be a
the market which, given it winner, and the company followed
represented a UK retailer boosting its it up with the $681 million capture
US footprint, feels fairly significant. of Shoe Palace. It will hope the $1.1
The US has often been a graveyard billion deal for Hibbett proves similarly
for the ambitions of UK companies keen successful.

A Specialist Solar Energy & Energy Storage Fund
NextEnergy Solar Fund is a leading specialist solar energy and energy storage
investment company that is listed on the premium segment of the London Stock
Exchange and is a constituent of the FTSE 250. NextEnergy Solar Fund invests
primarily in utility scale solar assets, alongside complementary ancillary
technologies, like energy storage.
NextEnergy Solar Fund is driven by a mission to lead the transition to

clean energy.
www.nextenergysolarfund.com
Approved for issue on 12 March 2024 in accordance with section 21 of the Financial Services and Markets Act 2000 by NextEnergy Capital Limited, which is authorised and
regulated by the Financial Conduct Authority. The registered office NextEnergy Capital Limited (“NEC”) is 75 Grosvenor Street, Mayfair, London, W1K 3JS, UK. Information about
NEC can be found on the Financial Services Register (Number 471192). NextEnergy Solar Fund is an equity investment and its value may go down as well as up and past
performance is not a reliable indicator of future performance. Your capital is at risk.
Ask Rachel: Your retirement questions answered
Should I use a SIPP

to supplement
my workplace
pension?
Our resident expert helps with a
query from someone approaching
their sixth decade
I’m going to be 50 next year, and so far, I have cash. Most people want to get an emergency pot
saved about £18,000 in a workplace pension. I have sorted first, then think longer-term towards things
been automatically enrolled since 2016. like pensions and investment ISAs.
My question is should I stick with it and get a SIPP If pension saving is the priority, then consider
pension as well? Or should I just put more in the whether to top up contributions to the workplace
workplace one until retirement? pension or contribute to another pension, such as
I hadn’t really thought about a pension until I a SIPP. (Most workplace pension savers should be
hit 50. able to easily top up their pension account.)
Fran There are a few things a pension saver should
think about when making this decision. Such
as: costs and charges, and how these compare
Rachel Vahey, between the two options. But also, how easy is
AJ Bell Head of Public Policy, says: it to manage these pensions. Having to track two
pensions with two different providers requiring
two logins etc. involves a bit of extra hassle. But on
Generally, for those who are members of a the other hand, the other pension provider may
workplace pension scheme, staying in that scheme offer a different experience – for example more
is likely to be sensible. They will get the extra bonus information or smoother administration. Having a
of their employer’s pension contributions, as well different pension account could also mean having
as upfront tax relief. And the combination of these different options – for example on investment
can mean it’s much easier to build up a pension choices or how to take pension money.
pot. (As you have already discovered.)
Beyond that individuals need to think about A WAKE-UP CALL
whether pension saving is their priority for spare When pension savers get to age 50, they get a

Ask Rachel: Your retirement questions answered
document from the pension provider that gives

a summary of the pension – a wake-up pack. It is
designed to prompt people to think about how
they want to take their pension money. (The
minimum age someone can receive pension pot
funds is age 55 – rising to age 57 from 2028.) This
could include how to generate an income when
that time comes and the retirement lifestyle they
want. This all feeds into how much someone could
contribute in the run up to retirement and how
much investment risk they might take.
These can be difficult decisions. There is help DO YOU HAVE A QUESTION ON
though. The Pensions and Lifetime Savings RETIREMENT ISSUES?
Association have published a set of ‘retirement Send an email to askrachel@ajbell.co.uk with the
living standards’ which can help people picture words ‘Retirement question’ in the subject line.
what kind of lifestyle they could have in retirement, We’ll do our best to respond in a future edition
and how much money they may need to get this. of Shares.
The government also offer a free, impartial Please note, we only provide information
guidance service – Moneyhelper. The guides can be and we do not provide financial advice. If you’re
very helpful in figuring out what questions to ask unsure please consult a suitably qualified financial
adviser. We cannot comment on individual
about pension savings, and what people need to investment portfolios.
think about.
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Index
Main Market Shell 8 Getty Realty 33 Investment Trusts

3i Group 8 T Clarke 36 Highwoods Properties 33 Alliance Trust 49
Associated British Foods 8 Tesco 58 Intel 6 JPMorgan Claverhouse 31
BAE Systems 8 Travis Perkins 24 Johnson & Johnson 25 Miton UK MicroCap Trust 42
Barclays 8 Unilever 23 Kellanova 26 STS Global Income &
29
Growth
Beazley 8 Wickes 24 Kellogs 26
BP 8 AIM Kenvue 25 Funds
Burberry 24 eTherapeutics 37 LAM Research 6 FP Octopus Multi Cap
41
Income Fund
Cranswick 33 Gaming Realms 16 Marriott International 26
FP Octopus UK Micro Cap
Darktrace 34 McDonald's 29 40
Kitwave 41 Growth Fund
Dowlais 26 REDX Pharma 37 Microsoft 29
ETFs
Dr Martens 21 Yu Group 42 Nestle 32
SPDR Global Dividend
Entain 17 Nvidia 6 33
Overseas shares Aristocrats
Experian 24 ON Semiconductor 6 Xtrackers IE Physical
25, 19
3M Gold ETC Securities
Flutter Entertainment 8 29 Parker Hannafin 29
Glencore 23 Abbott Laboratories 25 PayPal 25
DISCLAIMER
Gresham Technologies 36 Abbvie 25 Philip Morris
25 Shares publishes information and
International ideas which are of interest to investors.
GSK 23 ADP 29 It does not provide advice in relation
to investments or any other financial
Philips 24 matters. Comments published in Shares
Haleon 23 Advanced Micro
6 must not be relied upon by readers when
Devices Procter & Gamble 29 they make their investment decisions.
Intercontinental Hotels 8 Investors who require advice should
consult a properly qualified independent
Altria 25 Solvay 33 adviser. Shares, its staff and AJ Bell Media
Intermediate Capital 8 Limited do not, under any circumstances,
American States Solventum 25 accept liability for
JD Sports Fashion 61 29 losses suffered by readers as a result of
Water their investment decisions.
Taiwan Semiconductor
Jupiter Fund Manage- Apple 21 Manufacturing 6 Members of staff of Shares may hold
49
ment Company
shares in companies mentioned in the
magazine. This could create a conflict
Archer-Daniels-Midland 29 of interests. Where such a conflict exists
Kingfisher 7 Target 29 it will be disclosed. Shares adheres to a
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M&G 37 ASML out below.
24 Tesla 59
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securities, derivatives or positions with
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020 7378 4592 full personal interest register. The
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VOL 26 / ISSUE 16 / 25 APRIL 2024 / £4.

In the real world you

Growth Stalwarts: Rapid Growth: Cyclical Growth:

Find out more by visiting monksinvestmenttrust.co.uk

25 April 2024 | SHARES | 03

Three important things in this week’s magazine

on to increase their payouts investing in spin-offs? through micro-caps

Visit our website for more articles

04 | SHARES 25 April 2024

Explore our Investment Trust range

Warnings from chip giants casts

06 | SHARES | 25 April 2024

Retail sales not as bad as

25 April 2024 | SHARES | 07

FTSE 100 finally joins the new-highs

September 2007 2010/11

1985 1990 1995 2000 2005 2010 2015 2020

Chart: Shares magazine • Source: LSEG

08 | SHARES | 25 April 2024

United Airlines soars on upgrades

Ocado shares wobble after Ocado

Legal action and calls to for the online grocer. 600

25 April 2024 | SHARES | 09

Enjoy sophisticated investing made available to everyone

UK Retail giant Next sees strong first-

What the market

25 April 2024 | SHARES | 11

All eyes on sales momentum for US

12 | SHARES | 25 April 2024

Create a lasting investment legacy

UK housing market springs a surprise

14 | SHARES | 25 April 2024

Let them power your portfolio too

Buy underappreciated Gaming

16 | SHARES | 25 April 2024

REVENUE GROWTH BY TERRITORY

25 April 2024 | SHARES | 17

Discover the attractions of Asia’s income

Why investors should

Xtrackers IE Physical Xtrackers IE Physical Gold ETC

record highs as concerns about an escalating 30

25 April 2024 | SHARES | 19

Explore a world of income from the comfort of one

We’re sticking with Dr Martens

25 April 2024 | SHARES | 21

Unlock the potential of your investments

Are corporate spin-offs

25 April 2024 | SHARES | 23

24 | SHARES | 25 April 2024

WHY SPIN OFF IN THE FIRST PLACE? NOTABLE US AND UK SPIN-OFFS

25 April 2024 | SHARES | 25

In October 2023, Corn Flakes and company Marriott International

By Martin Gamble Education Editor

26 | SHARES | 25 April 2024

28 | SHARES | 25 April 2024

Investment trust STS Global Income & Growth

25 April 2024 | SHARES | 29

DPS = dividend per share CAGR = compound annual growth rate

Selected US dividend machines (stocks which have increased their

DPS = dividend per share CAGR = compound annual growth rate

Selected European dividend machines (stocks which have increased

DPS = dividend per share CAGR = compound annual growth rate

30 | SHARES | 25 April 2024

with the global spirits market. Because there are no